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MedImpact shops $1.2 billion of term loans at SOFR plus 550-575 bps
By Sara Rosenberg
New York, Sept. 22 – MedImpact (MI OpCo Holdings Inc.) is talking its $550 million 5.5-year first-lien term loan B and $650 million 5.5-year final maturity delayed-draw first-lien term loan B at SOFR+10 basis points CSA plus 550 bps to 575 bps with a 0% floor and an original issue discount of 99, according to a market source.
The term loan is non-callable for one year, and if the delayed-draw term loan is funded, the debt is non-callable for one year on the total funded balance from the draw date, the source said.
Ticking fees on the delayed-draw term loan are half the margin from days 31 to 60, the full margin from day 61 to 90 and the full margin plus SOFR thereafter.
There are no financial covenants at close; however, following funding of the delayed-draw term loan there is a net total leverage covenant of 3.75x, stepping down to 3.5x 18 months after consummation of an acquisition.
Amortization on the term loan B is 2.5% per annum and amortization on the delayed-draw term loan is 5% per annum.
The delayed-draw term loan is available to draw beginning at close and ending at the earliest of the date of an acquisition consummation, the date that is three months after closing if an acquisition agreement has not been executed, and the date that is 15 months after closing, the source continued.
Drawing the delayed-draw term loan is subject to 3.25x pro forma total net leverage.
BofA Securities Inc. is the left lead arranger on the deal that launched with a call on Thursday.
Commitments are due at 5 p.m. ET on Oct. 5, the source added.
Proceeds will be used to repay outstanding balances on the company’s existing revolving credit facility and term loan A, to pay associated fees and expenses, and to fund potential near-term acquisition opportunities.
MedImpact is a San Diego-based pharmacy benefit manager.
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