Stericycle, a medical waste management company, has amended its credit facility so that $51 million outstanding on its revolver has been reclassified as a part of the company's "A" term loan. By converting revolving debt to term debt and keeping the size of the revolver the same, the company increases availability under the revolver, said Frank ten Brink, Stericycle's executive v.p. and cfo. He explained that Stericycle had increased the usage of its revolver because of acquisitions, most recently, Scherer Healthcare for $41.5 million in cash in January.
The current credit, originally completed in November 1999, comprises a $105 million revolver, a $112 million "A" piece and a $47.2 million "B" tranche. The pricing of the tranches remained unchanged by the recent amendment with the pro rata set at LIBOR plus 11/2% and the term loan "B" at LIBOR plus 21/2%. The maturity on the credit was also extended one year so that the pro rata expires in 2007 and the "B" in 2008. Bank of America leads the deal.
In conjunction with the recent amendment, Lake Forest, Ill.-based Stericycle also repurchased $9.1 million of its 123/8% senior subordinated notes. By buying back the bonds the company was able to replace the relatively high interest rate of 123/8% with the interest rate applied to its revolver, said ten Brink. The transaction was privately negotiated with two of the company's bondholders and Stericycle paid a premium of $1.4 million. The company will continue to buy back more of its bonds at the right price, commented ten Brink.