Agiliti Health draws $34 million under revolver at Libor plus 300 bps

By Angela McDaniels

Tacoma, Wash., Jan. 10 – Agiliti Health, Inc. made a $34 million draw on its new $150 million five-year revolving credit facility on Jan. 4 and will draw its new $660 million delayed-draw seven-year first-lien term loan on Feb. 1, according to an 8-K filing with the Securities and Exchange Commission.

The revolver draw was used to help fund the creation of Agiliti through the merger of Universal Hospital Services, Inc. with Federal Street Acquisition Corp., a special-purpose acquisition company sponsored by an affiliate of Thomas H. Lee Partners, LP.

The company will use the term loan proceeds to redeem all of its 7 5/8% second-lien senior secured notes due 2020 on Feb. 4.

The initial interest rate on the senior secured credit facility is Libor plus 300 basis points. If the company lowers its first-lien leverage ratio to 3.75 times or below, the margin will decrease to 275 bps.

The revolver’s initial commitment fee is 50 bps. It ranges from 25 bps to 50 bps, depending on the first-lien leverage ratio.

As reported in October, Agiliti reduced pricing on the term loan (B1/B) from Libor plus 350 bps and tightened the original issue discount to 99.75 from 99.5.

The term loan still has a 0% Libor floor and 101 soft call protection for six months.

Beginning June 30, 2019, the term loan amortizes in equal quarterly installments of 1%.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and KeyBanc Capital Markets Inc. are the leads on the deal.

The new revolver has a springing financial covenant requiring compliance with a maximum ratio of first-lien net debt to consolidated EBITDA of 7 to 1. The covenant will be tested if the aggregate principal amount of borrowings under the revolver and letters of credit exceeds 35% of the total commitments under the revolver as of quarter’s end.

Agiliti is a Minneapolis-based provider of health-care technology management and service solutions.

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