Cerner amends, extends $700 million revolver, edits leverage covenant

By Wendy Van Sickle

Columbus, Ohio, May 7 – Cerner Corp. entered into an amendment on Monday to its third amended and restated credit agreement with U.S. Bank NA as administrative agent to extend the maturity date to May 5, 2024, according to an 8-K filing with the Securities and Exchange Commission.

The amendment also replaced the leverage ratio with a net leverage ratio covenant, under which cash and cash equivalents will be deducted from consolidated total funded debt for the purposes of determining compliance with the covenant, which the company said believes will provide it more operating flexibility.

The credit agreement provides for a $700 million revolving credit loan facility with a $100 subfacility for letters of credit.

There is a $300 million accordion feature.

As of Monday, there were no amounts outstanding under the facility other than letters of credit.

The initial interest rate is Libor plus 80 basis points, and the unused line fee is 6 bps.

The margin over Libor ranges from 80 bps to 160 bps, and the unused line fee ranges from 6 bps to 15 bps, both depending on the company’s net leverage ratio.

The amendment contains a mechanism for a Libor replacement if the administrative agent suspends the availability of advances based on Libor.

Cerner is a North Kansas City, Mo.-based designer, developer and marketer of health-care information technology, health-care devices and content solutions for health-care organizations and consumers.

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