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| David Koeninger |
Radiation Therapy Services has repaid its "B" loan with an amended "A" loan that reduces borrowing costs and increases flexibility. The company completed an initial public offering in June with some of the proceeds paying down part of the "B" loan. Reduced leverage and the new public profile are factors that helped the Fort Myers, Fla.-based company negotiate the amendments with its lenders. "The company's capital profile changed our leverage ratio, which was the key," said David Koeninger, Radiation Therapy's cfo.
The new facility comprises an $80 million revolver and a $25 million "A" loan. The company's prior facility comprised a $25 million "A" loan, $40 million "B" loan and a $70 million revolver. By increasing the size of the "A" tranche and revolver, Radiation Therapy was able to pay down the $22.8 million outstanding on its "B" loan. The "B" was priced at LIBOR plus 3 3/4%, while the previous "A" loan was priced at LIBOR plus 3 1/4%. Pricing on the new pro rata is LIBOR plus 1 3/4%.
The increased flexibility under the new line will allow Radiation Therapy to continue with an acquisitive growth strategy and to replace equipment. The radiation company recently acquired three new facilities in New Jersey and has approximately $50 million of bank debt outstanding.
Bank of America and Wachovia Securities are leads on both the old and new credits. Radiation Therapy's relationship with the two banks evolved from a local and ongoing relationship with both First Union Bank and NationsBank.Fifth Third Bank and SunTrust Bank, lenders in the previous facility, remain in the syndicate. Regions Bank and National City Bank were added to the lending group.