Kentucky-based Res-Care., along with its parent company Onex Rescare Holdings Corp., recently secured a $375 million credit agreement with Bank of America and other lenders for working capital and other general corporate purposes, including acquisitions and investments, according to the company’s SEC filing.
The credit agreement consists of a term loan for $175 million, and a revolving credit facility for $200 million that will have sublimits for swingline loans and the issuances of letters of credit. Both the term loan and the revolving credit facility mature on April 5, 2017.
Proceeds of the term loan were used to refinance Res-Care’s existing senior secured credit facility, while the revolving facility’s proceeds will be used for acquisitions, among other uses.
Res-Care’s agreement with Bank of America also allows the company to increase the aggregate principal amount of outstanding loans by up to $175 million, depending on certain conditions and subject to the receipt of additional lending commitments for these loans.
Outstanding amounts under the term loan and the revolving facility will initially have a yearly interest rate of either the LIBOR plus 2.75%, or a base rate equal to the lowest of the federal funds rate plus 1.00%; Bank of America’s prime rate; and the LIBOR plus 1.00%; plus 1.75%.
Res-Care spent about $23 million on acquisitions last year, with most of the companies it purchased falling under its home care and residential services divisions, according to CEO Ralph Gronefield Jr.
The company has previously stated plans to invest more and buy a greater number of companies than it did in 2011.
View the SEC filing here.
Written by Alyssa Gerace