Stericycle Secures $400 Million Credit Facility from Leading Banks

Strategic Insights -

Stericycle, Inc. (SRCL) has secured a new $400 million senior unsecured revolving credit facility from a group of prominent lenders, including Bank of America, N.A., JPMorgan Chase Bank, N.A., and Fortis Capital Corp. The new credit facility replaces the company's existing senior secured credit facility and will enable Stericycle to reduce its effective interest rate on borrowings. The agreement comes at a critical time for the company, which provides essential medical waste collection, transportation, treatment, and disposal services to the healthcare industry.

Key Takeaways:

  • Stericycle has obtained a new $400 million senior unsecured revolving credit facility from a group of leading banks, including Bank of America, N.A. as administrative agent, JPMorgan Chase Bank, N.A. as syndication agent, and Fortis Capital Corp. and Calyon New York Branch as co-documentation agents.
  • The new credit facility has a 5-year term, maturing in June 2010, and replaces the company's existing senior secured credit facility, which consisted of a $205 million revolving credit facility and a $62.4 million term A loan, both maturing in September 2007.
  • Under the new credit facility, the current effective interest rate on Stericycle's borrowings will be reduced from 1.25% to 0.75% over LIBOR on LIBOR rate borrowings.
  • The company will incur a one-time pre-tax charge of approximately $0.2 million in the quarter ending June 30, 2005, representing the write-off of unamortized fees relating to the prior credit facility.
  • Stericycle paid fees of approximately $1.2 million in connection with the new credit facility, which will be amortized over the 5-year term of the facility.

Statistics:

  • The new $400 million senior unsecured revolving credit facility has a 5-year term, maturing in June 2010.
  • The existing senior secured credit facility consisted of a $205 million revolving credit facility and a $62.4 million term A loan, both maturing in September 2007.
  • The current effective interest rate on Stericycle's borrowings will be reduced from 1.25% to 0.75% over LIBOR on LIBOR rate borrowings.
  • The company will incur a one-time pre-tax charge of approximately $0.2 million in the quarter ending June 30, 2005, representing the write-off of unamortized fees relating to the prior credit facility.
  • Stericycle paid fees of approximately $1.2 million in connection with the new credit facility.

Sources:

  • Managed Care Weekly Digest
  • NewsRx.com