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Wells Fargo Agents $100MM Upsize for Pharmaceutical Research Associates

January 02, 2018, 07:00 AM
Filed Under: Pharmaceuticals

Pharmaceutical Research Associates, Inc., a Virginia corporation (PRA) and a wholly-owned subsidiary of PRA Health Sciences, Inc., entered into a First Amendment and Second Joinder Agreement to the Credit Agreement, dated as of December 6, 2016 with Wells Fargo Bank, National Association, as administrative agent, collateral agent, letter of credit issuer and swingline lender.

Pursuant to the Amendment, PRA received new revolving credit commitments in aggregate principal amount of $100,000,000, on terms identical to those applicable to the existing revolving credit facility under the Credit Agreement. Further, pursuant to the Amendment, the Credit Agreement was amended to provide a new tranche of term loans (the “Replacement Term Loans”) in an aggregate principal amount of $601,562,500, the proceeds of which were used to refinance and replace in full the existing tranche of initial term loans outstanding prior to the effectiveness of the Amendment. The existing tranche of Series A term loans created pursuant to the Joinder was not modified by the Amendment and remains outstanding.

Under the terms of the Amendment, the Replacement Term Loans mature on December 6, 2021 and bear interest at a rate equal to LIBOR or the adjusted base rate (“ABR”), plus an applicable margin based on the ratio of total indebtedness to EBITDA, ranging from 1.00% to 2.00%, in the case of LIBOR rate loans, and 0.00% to 1.00%, in the case of ABR rate loans. The Replacement Term Loans will amortize in equal quarterly installments of an aggregate annual amount equal to 2.5% of the original principal amount of the Replacement Term Loans, with any remaining balance payable at maturity. Additionally, the Amendment modified the definition of “Permitted Investments” and refreshed the capacity for incremental credit facilities under the Credit Agreement. Other than with respect to the applicable interest rate, amortization schedule, permitted investments and incremental credit facilities, all terms and conditions applicable to the Replacement Term Loans, including provisions governing mandatory and voluntary prepayments, affirmative and negative covenants and events of default and related penalties, are substantially the same as the terms and conditions contained in the Credit Agreement, as previously disclosed in the Company’s Current Report on Form 8-K filed with the SEC on December 6, 2016 (the “December 2016 8-K”).

Additionally, PRA Holdings, Inc., a wholly-owned subsidiary of the Company, intends to redeem all $91,441,000 of its outstanding 9.5% senior notes due 2023, on December 29, 2017.  We expect to fund the redemption, including applicable premiums and related fees and expenses, with borrowings under the Company’s revolving credit facility and cash on hand.

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