Hanger, Austin, Texas, announced the closing of a new $605 million senior credit facility that consisted of a $100 million, five-year revolving credit facility and a $505 million, seven-year term loan B. Proceeds from the new term loan B were used to fully repay all outstanding principal under Hanger’s prior senior credit agreement, totaling $152 million and its $280 million unsecured term loan B credit agreement.
In addition, the new term loan B was used to pay the call premium on an unsecured term loan B, related transaction fees, accrued and unpaid interest and expenses, and to fund general corporate uses. The new revolving credit facility was undrawn at closing.
In connection with the senior credit facility, Hanger plans to enter into a six-year interest rate swap agreement that will fix the interest rate on an initial balance of approximately $325 million of its floating rate debt under the new term loan B. The new term loan B simplifies Hanger’s capital structure and is expected to result in a reduction to the company’s cost of capital by significantly reducing the effective interest rate on its term indebtedness.
