Capella extends maturity of ABL facility, reduces pricing

By Marisa Wong

Madison, Wis., June 9 – Capella Healthcare, Inc. entered into a third amendment on June 3 to its $100 million loan and security agreement dated June 28, 2010 with Bank of America, NA as agent, according to an 8-K filing with the Securities and Exchange Commission.

The amendment extends the maturity date of the revolving credit commitments under the ABL agreement from Dec. 29, 2014 to the earlier of (i) June 3, 2019 or (ii) April 1, 2017, if, as of that date, the company’s 9¼% senior notes due 2017 have not been repaid in full or refinanced.

Additionally, the amendment reduces the applicable margin for Libor revolver loans to a range of 150 basis points to 200 bps from 300 bps to 350 bps. The applicable margin is based on the company’s fixed-charge coverage ratio.

The unused line fee was reduced to 25 bps to 37.5 bps from 50 bps to 75 bps.

The amendment also revises obligations on terms more favorable to the company, including amending terms regarding trigger periods, the ability to include provider tax-related receivables in the borrowing base, reporting obligations, health care-related representations and warranties, events of default, financial covenants and restrictions on liens, sale leaseback transactions, acquisitions, dispositions, distributions, investments, prepayments of subordinated debt, fundamental changes and affiliate transactions.

Capella Healthcare is a Franklin, Tenn.-based developer and operator of health care facilities.

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