Genesis Healthcare amends loans after failure to meet leverage test

New York, May 9 – Genesis Healthcare, Inc. said it amended its credit facilities on May 5 to address its failure to meet the maximum leverage covenant as of March 31.

For the company’s term loan agreement and bridge loan with Welltower, the breach of the covenant was waived, according to a 10-Q filing with the Securities and Exchange Commission.

Genesis Healthcare also has a revolving credit facility which was amended to bring the company into compliance with the covenant.

The amendments also amended all the future covenant levels.

Following the changes, the most restrictive covenant is for the maximum leverage ratio, requiring a figure of no more than 7.25 to 1 through Dec. 31, 2017 and stepping down over the term of the loans to 6.5 to 1 in 2020, the company said.

The revolving credit facility is an asset-based loan of up to $550 million in four tranches all due Feb. 2, 2020.

Genesis Healthcare’s term loan is a $120 million four-year loan due July 29, 2020 with an affiliate of Welltower Inc. and an affiliate of Omega Healthcare Investors, Inc.

The Welltower bridge loan is made up of four agreements due Jan. 1, 2022.

Genesis Healthcare is a Kennett Square, Pa.-based skilled nursing care provider.

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