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Healthcare Finance Group Provides $18MM DIP Financing to KidsPeace

June 06, 2013, 08:07 AM
Filed Under: Bankruptcy

Healthcare Finance Group announced it has provided $18.0 million in debtor-in-possession financing to KidsPeace Corporation ("KidsPeace").

KidsPeace provides pediatric behavioral health services with residential treatment facilities in Pennsylvania, Minnesota, Maine and Georgia.  The Company also operates a pediatric psychiatric hospital in Pennsylvania and has foster care and community care programs in 8 states and the District of Columbia. KidsPeace announced that it filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code on May 21, 2013 with the purpose of reducing and restructuring its obligations in connection with its outstanding revenue bonds and its defined benefit pension plan.  Prior to its filing, the Company entered a Plan Support Agreement and a Term Sheet for a Plan of Reorganization with a majority of the bondholders and a Termination Agreement with the Pension Benefit Guarantee Corporation.

HFG provided a Debtor-in-Possession facility with proceeds to be used to refinance KidsPeace's existing working capital facility and to provide financing for post-petition working capital needs, administrative costs related to the bankruptcy, and other general corporate purposes. The DIP facility consists of a $13 million Revolving Line of Credit Facility and a $5 million Delayed Draw Term Loan.

James Horan, EVP and CFO of KidsPeace, commented, "We were impressed with HFG's persistence in working with us over many months and through several phases of our planning, and with their ability and willingness to be creative in finding a solution for our needs.  We are pleased to have found a financing partner that will be able to aid our restructuring as we enter this new chapter in our history."

Regarding the transaction, Claudia Gourdon, Senior Vice President and National Marketing Manager of HFG, said, "KidsPeace provides unique and vital community services, and HFG is very glad to be able to provide it with the financing it needs as it re-establishes its financial health. With its solid and dedicated staff and excellent clinical reputation, KidsPeace has all the fundamental ingredients to successfully emerge from bankruptcy, and we look forward to being its financial partner for years to come."

KidsPeace, a private, not-for-profit, 501(c)(3) children's charity founded in 1882, is a leading pediatric behavioral healthcare company.  The mission of KidsPeace, and its sole corporate members, is to give hope, help and healing to children facing crisis and offering the highest quality prevention, public education, hospital, residential, education, adoption, foster care and community based services. It is one of the oldest and largest organizations designed to help children facing crisis.
HFG is a specialty lender dedicated exclusively to providing secured debt financing to healthcare companies.  HFG strives to custom-tailor its products to meet the specific needs of its clients. HFG is headquartered in New York City and has new business offices throughout the U.S.

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