NovaMed enters into amended credit agreement

NovaMed, Inc. (Nasdaq: NOVA), a leading operator of ambulatory surgery centers in partnership with physicians, today announced that it has entered into an amendment to its credit agreement. The key terms of the amended credit agreement are as follows:

• $80 million senior secured credit facility consisting of a $50 million revolving credit facility and a $30 million term loan facility. NovaMed has an option to increase the size of the revolving credit facility to $95 million under certain conditions.
• The term of the credit facility has been extended to December 15, 2011. However, if NovaMed has repaid or refinanced its convertible senior subordinated notes prior to this date, the term will be extended to August 30, 2012.
• NovaMed will be subject to a maximum total leverage ratio of 5.0 times initially, which will decrease to 4.75 times for the fiscal quarter ending December 31, 2009, 4.25 times for the fiscal quarter ending December 31, 2010 and 4.0 times for the fiscal quarter ending December 31, 2011 and thereafter.
• NovaMed will be subject to a maximum senior leverage ratio of 2.5 times initially, which will decrease to 2.25 times for the fiscal quarter ending December 31, 2010 and thereafter.
• Interest on borrowings under the facility is payable at an annual rate equal to LIBOR plus a range from 2.75% to 5.00% or Prime plus a range from 0.75% to 3.00%, depending on NovaMed’s total leverage ratio. At the company’s current total leverage ratio of 4.3 times, NovaMed’s interest rate on borrowings will be LIBOR plus 4.5% or Prime plus 2.5%.

National City Bank remains as agent, with Bank of America, TD Banknorth, Siemens Financial Services and First Merit Bank, as the other participating banks. NovaMed intends to continue to use its credit facility for acquisitions as well as general corporate purposes.

“In light of current credit market conditions, we are pleased with the terms of our amended credit facility,” commented Thomas S. Hall, Chairman, President and Chief Executive Officer of NovaMed.

http://www.novamed.com