Computer Programs lowers facilities to $162 million, extends to 2022

By Wendy Van Sickle

Columbus, Ohio, Oct. 17 – Computer Programs and Systems, Inc. entered into a second amendment to its credit agreement dated Jan. 8, 2016 with Regions Bank as the administrative agent on Friday to refinance and decrease the committed size of the credit facilities to $162 million from $175 million, according to an 8-K filing with the Securities and Exchange Commission.

The credit facilities include a $117 million term loan and a $45 million revolving credit facility.

Additionally, the maturity date of the amended facilities was extended to Oct. 13, 2022, and the maximum consolidated leverage ratio was increased to 3.95 times through Dec. 31 and to 3.5 times starting Jan. 1. Previously, the ratio had been 2.5 times.

Borrowings under both the term loan facility and the revolver bear interest at Libor plus 275 basis points initially. After Computer Programs certifies its consolidated leverage ratio for the third quarter of 2017, interest will range from Libor plus 200 bps to 350 bps, down from Libor plus 225bps to 350 bps.

The commitment fee under the revolver is 40 bps initially, and after the company certifies its consolidated leverage ratio for the third quarter of 2017, it will range from 25 bps to 50 bps, reduced from 30 bps to 50 bps.

Proceeds of the amended facilities, including $30.16 million drawn on the revolver, were used to refinance the existing credit facilities, fund fees and expenses and finance the ongoing working capital requirements and other general corporate purposes of the company.

Computer Programs said it expects the savings to be realized from the reduced pricing over the term of the amended facilities to cover the fees and expenses associated with the amendment.

The term loan requires quarterly principal repayments of about $1.46 million through the quarter ending Sept. 30, 2019; about $2.19 million through the quarter ending Sept. 30, 2021; and about $2.93 million through the quarter ending Sept. 30, 2022. The balance will be due at maturity.

Regions Capital Markets is the lead arranger and bookrunner, Compass Bank is the syndication agent, and Hancock Bank is the documentation agent.

Computer Programs is a Mobile, Ala.-based provider of healthcare solutions for community hospitals. Healthland is a Minneapolis-based provider of integrated technology solutions to rural community and critical access hospitals.

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