30.1.2003: Meldung: Stericycle, Inc.: Repurchase of $ 9.1 Million of Senior Subordinated Debt
Wednesday January 29, 4:12 pm ET
The amendment to the senior secured credit facility increases Stericycle"s borrowing capacity by $51 million
The repurchase of $9.1 million of senior subordinated debt reduces Stericycle"s weighted average cost of capital and reduces future interest expenses
Stericycle, Inc. (NASDAQ: SRCL - News) announced today that it has amended its senior secured credit facility with a group of lenders led by Bank of America N.A. to increase its borrowing capacity by $51 million by reclassifying borrowings under its revolving credit facility to Term A loans. As amended, the credit facility consists of a $105 million revolving credit facility, a $112.6 million Term A loan facility and a $47.2 million Term B loan facility.
The amendment also revises the amortization schedules for the Term A and Term B loans and extends the maturity dates of all loans for one year, to September 30, 2007 in the case of the revolving credit facility and Term A loans, and to September 30, 2008 in the case of the Term B loans. Under the amended credit facility, the revolving loan facility and the Term A loan facility have a current interest rate of 1.50% over LIBOR, and the Term B loan facility has a current rate of 2.50% over LIBOR. The amendment has resulted in a one-time charge of approximately $300,000, which will be recorded as one-time interest expense during the quarter ending March 30, 2003. This one-time expense, and any future benefits from the repurchase, have not been included in previous guidance given.
Stericycle also announced today that it repurchased a total of $9.1million in principal amount of its 12-3/8% senior subordinated notes due 2009. The repurchases were made at prevailing market prices in privately negotiated transactions with two note holders. In connection with these repurchases, Stericycle paid a premium of approximately $1.4 million in addition to the principal amount of the notes. This premium will be recorded as one- time interest expense during the quarter ending March 30, 2003. This one-time expense, and any future benefits from the repurchase, have not been included in previous guidance given.
The combined result of the loan amendment fees and the premium in connection with the repurchase of the bonds will have an impact of approximately $0.02 per share. Excluding this effect we believe we are on track with our prior public guidance of earnings per share for 2003 of $1.29 - $1.33 including the recently announced acquisitions of Micro-Med Industries, Inc. and Scherer Healthcare, Inc.
Stericycle"s outstanding 12-3/8% senior subordinated notes may not be called for redemption prior to November 15, 2004. When the notes can be called, a premium of 6.125% is payable in connection with redemptions during the first year.
Stericycle"s President and Chief Executive Officer, Mark C. Miller, said, "The amended senior secured credit facility gives Stericycle more flexibility, extends its maturity, and reduces the interest rates in the future. We also welcomed the opportunity that arose to repurchase an additional $9.1 million of our senior subordinated notes. Our analysis showed that the repurchase of the notes provides an acceptable return on the use of our funds and contributes to the lowering of our weighed average cost of capital."
Cynthia Martin (MR), 312/641-6741
Leslie Loyet (IR), 312/640-6672
Source: Stericycle, Inc.