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BofA, SunTrust Lead Lenders in $225MM Amendment for Providence Service Corp.

August 06, 2013, 07:26 AM
Filed Under: Specialty Industries

The Providence Service Corporation has refinanced its existing credit facility with an amended and restated senior secured credit facility in an aggregate principal amount of $225 million. The debt financing was led by Bank of America, N.A. and SunTrust Bank.

The amended and restated credit facility is comprised of a $60 million, five-year term loan and a $165 million, five-year revolving credit facility. In addition to refinancing the Company's existing debt obligations, the proceeds of the amended and restated senior secured credit facility may be used to, make capital expenditures such as acquisitions, repay Providence's 6.5% Convertible Senior Subordinated Notes due in 2014, fund ongoing working capital requirements, and for other general corporate purposes.

Interest accrues on the outstanding principal amount of the loans at a rate per annum of LIBOR plus an applicable margin, which ranges from 1.75% to 2.50% and is payable quarterly based on the company's consolidated leverage ratio as defined in the credit agreement governing the facility. At the Company's election, interest can accrue at an alternative base rate plus an applicable margin ranging from 0.75% to 1.50%.

The company is also obligated to pay a commitment fee on the unused portion of the revolving credit facility and pay letter of credit fees on the maximum amount available to be drawn under each letter of credit outstanding under the revolving credit facility. The commitment fee ranges from 0.25% to 0.50% and the letter of credit fee ranges from 1.75% to 2.50%, in each case, payable quarterly based on the consolidated leverage ratio of the company.

The Providence Service Corporation provides or manages the delivery of home and community based social services and NET management services to primarily government sponsored clients under programs such as welfare, juvenile justice, Medicaid and corrections.

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