Premier units refinance with expanded $750 million five-year revolver

By Susanna Moon

Chicago, June 25 – Premier, Inc.’s subsidiaries obtained a $750 million five-year unsecured revolving facility arranged by Wells Fargo Securities, LLC and Bank of America Merrill Lynch, according to an 8-K filing with the Securities and Exchange Commission.

Interest on the loans is initially Libor plus 112.5 basis points with the spread ranging from 112.5 bps to 175 bps based on leverage. At closing, interest for eurodollar loans was 1.355%.

Premier Healthcare Alliance, LP, along with wholly owned subsidiaries Premier Supply Chain Improvement, Inc. and Premier Healthcare Solutions, Inc., Premier Services, LLC and some domestic subsidiaries of Services entered into a credit agreement on Tuesday with Wells Fargo Bank, NA as administrative agent.

Bank of America, NA. is the syndication agent. Citibank, NA, JPMorgan Chase Bank, NA and SunTrust Bank are the co-documentation agents.

The revolver matures on June 24, 2019 and replaces the $100 million senior secured revolving credit facility that was set to mature on Dec. 16, 2014. The previous facility had no outstanding borrowings at closing.

The facility includes a $25 million subfacility for standby letters of credit and a $75 million subfacility for swingline loans.

The agreement also allows the companies to request an increase to the maximum size up to an aggregate of $250 million, with lender approval.

The unused fee is initially 12.5 bps and ranges from 12.5 bps to 25 bps.

The credit terms require the company to maintain a consolidated total leverage ratio of no more than 3 times for any period of four consecutive fiscal quarters. In addition, the minimum consolidated interest coverage ratio is also 3 times.

“Our refinancing provides Premier with additional access to capital at very favorable rates,” Craig McKasson, Premier senior vice president and chief financial officer, said in a company press release.

“It also provides greater flexibility to our capital structure as we seek to invest in the long-term growth of our company and execute our business strategy.”

Premier is a leading healthcare improvement company based in Charlotte, N.C.

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