Spectranetics signs five-year, $110 million agreement in two tranches

By Wendy Van Sickle

Columbus, Ohio, Dec. 7 – Spectranetics Corp. entered into an agreement for a five-year $60 million term loan and a five-year $50 million revolving credit facility on Monday, according to an 8-K filed with the Securities and Exchange Commission.

Midcap Financial Trust and Silicon Valley Bank led the financing.

The term loan borrowings bear interest at Libor plus 750 basis points. The margin will be reduced to 650 bps if the company’s EBITDA is at least $6 million for a certain period and certain other conditions are met.

Term loan borrowings may be prepaid subject to a prepayment fee of 3% of any amount prepaid in the first year following the closing date and 2% of any amount prepaid after that. The term loan facility is subject to an exit fee of 4% of the amount borrowed.

The term loan has interest-only payments for the first 24 months. It may be extended for up to one additional year upon achievement of certain targets.

Revolver borrowings bear interest at Libor plus 445 bps. There is an unused fee of 50 bps.

The revolver has a $20 million accordion feature.

Spectranetics is required to maintain cash and cash equivalents of at least $10 million and must also meet certain minimum net revenue requirements.

The company drew the full amount of terms loans and $18 million under the revolver at closing.

Proceeds were used for general working capital and corporate purposes and to repay about $3 million outstanding under the company’s previous credit agreement with Wells Fargo Bank, NA, which was terminated. That facility provided for a $65 million revolver and was due to mature in June 2019.

The company said in a press release that the new facility “is structured to provide ample liquidity through the U.S. launch of its Stellarex drug-coated balloon.”

Colorado Springs-based Spectranetics makes single-use medical devices for the cardiovascular system.

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