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MedAssets Closes Debt Refinancing, Lowering Interest Rate

December 14, 2012, 07:34 AM

MedAssets, Inc. announced the completion of a new $750 million senior secured credit facility. Proceeds were used to extinguish the company’s existing $484 million Term Loan B due 2016 and $150 million revolving credit facility due 2015, of which $90 million was outstanding, and to pay related fees and expenses.

The new senior secured credit facility consists of: a $300 million, seven-year Term Loan B bearing interest at LIBOR plus 2.75 percent subject to a 1.25 percent LIBOR floor; a $250 million, 5-year Term Loan A bearing interest at LIBOR plus 2.50 percent; and, a $200 million, 5-year revolving credit facility bearing interest at LIBOR plus 2.50 percent, of which $50 million was drawn at closing. In addition, the Company terminated forward interest rate swaps associated with the indebtedness that was refinanced.

Financial Impact of Debt Refinancing

  • The refinancing is expected to result in approximately $6 million in annual cash interest savings as the new term loans have a lower blended interest rate of approximately 3.6 percent per annum compared to the prior blended interest rate of approximately 4.9 percent per annum, assuming that LIBOR does not increase.
  • In the fourth quarter ending December 31, 2012, the Company will incur one-time charges including a write-off of approximately $20 million of non-cash deferred financing costs and original issue discount related to the refinanced indebtedness; and a swap termination charge of approximately $8 million.
  • The company’s non-GAAP adjusted EPS guidance for the fourth quarter and full year of 2012 remains unchanged as the one-time charges will be added back in its calculation of adjusted earnings per share.
  • The company expects the refinancing will be accretive to fiscal 2013 earnings per share by approximately $0.07.

MedAssets partners with healthcare providers to improve their financial strength by implementing revenue cycle, spend and clinical resource management solutions that help capture revenue, control cost, improve margins and cash flow, increase regulatory compliance, and optimize operational efficiency. MedAssets serves more than 4,200 hospitals and 100,000 non-acute healthcare providers.

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