Sotera Health Company (“Sotera Health” or the “Company”) (Nasdaq: SHC), a leading global provider of essential end-to-end sterilization solutions and laboratory testing and advisory services for the healthcare sector, has announced the successful closure of significant financial transactions. Today, the Company’s direct subsidiary finalized a new senior secured Term Loan B facility totaling $1.51 billion (the “TLB”) and issued senior secured notes worth $750.0 million (the “Notes”), both maturing in 2031. These transactions collectively known as the “Financings” were completed to enhance the Company’s financial structure. The net proceeds from these Financings, in addition to available cash, were utilized to refinance existing Term Loan B facilities totaling $1.76 billion and $496.3 million respectively.
Chairman and Chief Executive Officer, Michael B. Petras, Jr., commented on the refinancing, stating, “We are pleased to secure the successful refinancing of our capital structure with a $1.5 billion Term Loan B and $750M of Senior Secured Notes, reflecting favorable terms for the Company. The positive market reception underscores the strength of our business. This refinancing is anticipated to yield approximately $5 million in interest expense savings for 2024, thereby reducing our interest expense outlook to a range of $165M – $175M.”
The TLB issuance was executed alongside an amendment to the Company’s existing First Lien Credit Agreement. The TLB will accrue interest at a variable rate per annum plus an applicable margin, offering the Company the choice between 3.25% for SOFR-based loans or 2.25% for alternate base rate loans (both subject to a 0% floor), payable in arrears. Prepayment of the TLB is allowed without premium or penalty six months after the closing date, with a 1.00% premium applicable for certain repricing transactions within the first six months after the closing date. The TLB requires an annual payment down of 1.00% of the aggregate principal amount ($15.1 million), with the remaining balance due in 2031. The TLB covenants mirror those of the Company’s existing First Lien Credit Agreement.
The Notes will carry a fixed interest rate of 7.375% per annum, payable semi-annually in arrears. These Notes will be guaranteed by the Company and all other entities that guarantee the existing First Lien Credit Agreement. Both the Notes and related guarantees will be secured on a first lien basis by substantially all assets of the issuer and the guarantors, with exceptions for excluded assets and certain other stipulations.
