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Orthofix obtains $300 million five-year revolving credit facility
By Wendy Van Sickle
Columbus, Ohio, Oct. 28 – Orthofix Medical Inc. entered into a $300 million five-year credit agreement on Friday with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.
The company’s wholly owned subsidiaries Orthofix Inc., Orthofix Spinal Implants Inc., Orthofix International BV and Orthofix III BV are the borrowers.
The new secured revolving credit facility amends and restates the company’s existing $125 million revolver.
The facility is available in U.S. dollars, with up to $150 million also available in euros and pounds sterling. It allows for up to $50 million for letters of credit in the agreed currencies.
Orthofix may increase the facility in the form of one or more increases to the revolving credit commitments and/or the issuance of one or more new term A loans by up to the greater of $150 million or an amount such that the total amount of the facility does not exceed 350% of consolidated EBITDA of the company.
Interest is equal to Libor plus 125 basis points to 225 bps, based on the company’s total leverage ratio. The commitment fee ranges from 15 bps to 25 bps, also based on leverage.
The credit agreement contains financial covenants requiring Orthofix, on a consolidated basis, to maintain a maximum total leverage ratio of 3.5 times, which maybe increased to up to 4 times for up to four quarters following a material acquisition, and a minimum interest coverage ratio 3 times.
Borrowings may be used for, among other things, working capital and other general corporate purposes.
JPMorgan, Bank of America, NA, Bank of the West and SunTrust Bank are joint lead arrangers and bookrunners. Bank of America, Bank of the West and SunTrust are syndication agents. BBVA is the documentation agent.
Orthofix is a Curacao-based medical device company.
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