Summary
HCA Healthcare, Inc. (HCA) announced a material definitive agreement through its wholly owned subsidiary, HCA Inc., on July 16, 2019. The company entered into a joinder agreement to refinance its existing senior secured term A-5 loan credit facility. This refinancing involves the establishment of a new $1.120 billion senior secured term A-6 loan credit facility, which will mature on July 16, 2024. This new facility replaces the previous one maturing in June 2020 and aims to lower pricing on borrowings. The interest rate will be variable, based on HCA Inc.'s consolidated total debt to consolidated EBITDA ratio, currently set at LIBOR plus a 1.375% applicable margin or a base rate plus a 0.375% applicable margin. This move indicates HCA's proactive management of its debt structure and a focus on optimizing borrowing costs.
Key Highlights
- 1HCA subsidiary entered into a joinder agreement for a new senior secured term loan credit facility.
- 2New facility is for $1.120 billion and matures on July 16, 2024.
- 3The new facility refinances the existing senior secured term A-5 loan credit facility maturing in June 2020.
- 4The primary goal of the refinancing is to achieve lower borrowing costs (pricing).
- 5The interest rate on the new facility is variable, tied to debt-to-EBITDA ratios.
- 6Current interest rate is LIBOR + 1.375% or base rate + 0.375%.