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Centene enters into new $500 million revolving facility due 2018
By Marisa Wong
Madison, Wis., May 22 - Centene Corp. entered into a new $500 million revolving credit agreement on May 21 with Barclays Bank plc as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.
The new credit agreement replaces the company's existing credit agreement dated Jan. 31, 2011, which provided for a $350 million revolving facility due 2016. The prior agreement was terminated upon closing of the new facility. There were no outstanding borrowings under the old revolver.
The new revolving facility is due June 1, 2018, provided it will mature 90 days prior to the maturity date of the company's 5¾% senior notes due 2017 if the notes are not refinanced or extended or specific financial conditions are not met.
The revolver has a $100 million accordion feature, up from $50 million under the previous facility.
Interest is equal to Libor plus 150 basis points to 250 bps, depending on the company's total debt-to-EBITDA ratio. The spreads are 100 bps lower than those under the old revolver, the filing noted.
There is a non-use fee that ranges from 25 bps to 37.5 bps and a letter-of-credit fee of 150 bps to 250 bps, based also on the total debt-to-EBITDA ratio.
The agreement contains non-financial and financial covenants, including minimum fixed-charge coverage ratios, minimum debt-to-EBITDA ratios and minimum tangible net worth, the filing noted.
Barclays Bank plc, SunTrust Robinson Humphrey, Inc. and Wells Fargo Securities, LLC are the joint lead arrangers and joint bookrunners for the facility. Wells Fargo Bank, NA is the syndication agent, and Citibank NA, Regions Bank, SunTrust Bank and U.S. Bank NA are the documentation agents.
Centene is a St. Louis-based health-care company.
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