Veradigm Llc and Veradigm Inc. Enter into USD 100 Million Senior Secured Term Loan Credit Facility

Published: 2025-06-20 07:05:23 ET MDRX

Published on 06/20/2025 at 07:05

On June 18, 2025, Veradigm Inc., a Delaware corporation, and Veradigm LLC, a North Carolina limited liability company, entered into a Credit Agreement with Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent, and the several banks and other financial institutions or entities from time to time party thereto as lenders, including certain affiliates of Francisco Partners. The Credit Agreement provides for a $100 million senior secured term loan credit facility, consisting of a $75 million initial term loan funded on June 18, 2025 and a $25 million delayed draw term loan facility available until December 18, 2026, each with a maturity date of June 18, 2030. Proceeds from the borrowings under the Credit Agreement will be used for repurchases, if required, of Veradigm?s 0.875% Convertible Senior Notes due 2027, and otherwise for general corporate purposes.

As previously disclosed, since 2020, Dave Stevens, a member of Veradigm?s Board of Directors, has been an operating partner of Francisco Partners Consulting. Mr. Stevens recused himself from participating in the Board?s decision to enter into the Credit Agreement. Interest on the outstanding principal amount of the loans accrues at a per annum rate equal to the Base Rate or the Adjusted Term SOFR Rate, as applicable, each as defined in the Credit Agreement, in each case, plus a margin equal to 7.50% in the case of Term Benchmark Loans or 6.50% in the case of Base Rate Loans, each as defined in the Credit Agreement.

Interest on the loans is payable (i) quarterly in arrears in the case of Base Rate Loans and (ii) on the last day of the relevant interest period in the case of Term Benchmark Loans. From the closing date until June 30, 2027, Veradigm may elect to pay interest in cash or in-kind. After June 30, 2027, Veradigm will pay interest in cash.

In addition, the Borrowers paid closing fees to the lenders equal to 2.00% of the aggregate principal amount of the Term Loan Facility. Subject to certain agreed upon exceptions, all obligations under the Term Loan Facility are guaranteed by each of Veradigm?s existing and future direct and indirect material domestic subsidiaries, other than certain Excluded Subsidiaries pursuant to the Guarantee and Collateral Agreement, dated as of June 18, 2025, among Veradigm, the Company, the Guarantors, and the Administrative Agent and the Collateral Agent. The obligations of the Borrowers and each Guarantor under the Term Loan Facility are secured subject to permitted liens and other agreed upon exceptions, by a perfected first priority security interest in all of the tangible and intangible assets (including, without limitation, intellectual property and all of the capital stock of the Company, each Guarantor and, in the case of foreign subsidiaries, up to 65% of the voting equity interest of first tier foreign subsidiaries) of Veradigm, the Company, and the Guarantors, other than Excluded Assets (as defined in the Guarantee and Collateral Agreement).Veradigm is permitted to voluntarily prepay outstanding loans under the Term Loan Facility, in whole or in part, at Veradigm?s option, in certain minimum amounts.

The Term Loan Facility also contains certain mandatory events of prepayment triggered by non-permitted debt incurrences and certain asset sales. These voluntary and mandatory prepayments must be accompanied by the payment of a premium equal to (i) on or prior to June 18, 2026, a customary make-whole amount plus 3.00% of the principal amount prepaid, (ii) after June 18, 2026 but on or prior to June 18, 2027, 3.00% of the principal amount prepaid, (iii) after June 18, 2027 but on or prior to June 18, 2028, 1.00% of the principal amount prepaid and (iv) thereafter, 0.00%. The Term Loan Facility does not amortize.

The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, the ability of Veradigm and its subsidiaries to: incur indebtedness (including guarantee obligations); create liens on and sell assets; engage in mergers or consolidations or change lines of business; declare dividends and other payments in respect of Veradigm?s capital stock, prepay junior indebtedness and prepay and repurchase convertible securities, and amend terms of junior indebtedness; make investments, loans, advances, guarantees and acquisitions; and engage in transactions with affiliates.