Item 1.01
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Entry into a Material Definitive Agreement.
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On November 13, 2018, MEDNAX, Inc., a Florida corporation (
MEDNAX
or the
Company
), issued
$500 million aggregate principal amount of 6.25% senior unsecured notes due January, 2027 (the
Notes
) pursuant to the Companys existing base indenture, dated December 8, 2015 (the
Base
Indenture
), by and among the Company and U.S. Bank National Association, a national association, as trustee thereunder (the
Trustee
), and the Fifth Supplemental Indenture, dated November 13, 2018 (the
Fifth
Supplemental Indenture
and, together with the Base Indenture, the
Indenture
), by and among the Company, certain of the Companys subsidiaries as guarantors (the
Guarantors
) and the Trustee. The
Notes were sold to certain initial purchasers (the
Initial Purchasers
) in a private offering that was exempt from the registration requirements of the Securities Act of 1933, as amended (the
Securities Act
). The
Notes are expected to be resold by the Initial Purchasers in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act and outside the United States to
non-U.S.
persons
pursuant to Regulation S under the Securities Act. The net proceeds received by the Company from the sale of the Notes was approximately $492.5 million after deducting the discounts to the Initial Purchasers and the estimated offering expenses
payable by the Company.
The Notes are unsecured senior obligations of the Company. The Companys obligations under the Notes are
guaranteed on a senior unsecured basis by each of the Companys current and future subsidiaries that is or becomes a guarantor under the Companys existing senior unsecured credit agreement.
The Notes mature on January 15, 2027. Interest on the Notes will accrue at the rate of 6.25% per annum and will be payable
semiannually in cash on January 15 and July 15 of each year, with an initial interest payment on January 15, 2019.
At any
time prior to January 15, 2022, the Company may redeem all or any part of the Notes, upon not less than 30 nor more than 60 days notice, at a redemption price equal to 100% of the principal amount thereof, plus the applicable
make-whole premium and accrued and unpaid interest to (but not including) the redemption date. On or after January 15, 2022, the Company may redeem all or a part of the Notes upon not less than 30 nor more than 60 days notice,
at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Notes redeemed, to (but not including) the applicable redemption date, if redeemed during the twelve-month
period beginning on January 15 of the years indicated below:
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Period
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Redemption Price
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2022
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104.688
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%
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2023
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103.125
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%
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2024
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101.563
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%
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2025 and thereafter
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100.000
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%
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In addition, before January 15, 2022, the Company may redeem up to 35% of the aggregate principal amount
of the Notes with the net proceeds of certain equity offerings at a redemption price equal to 106.250% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, on the Notes redeemed, to (but not including) the
applicable redemption date.
The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.
Upon the occurrence of a change in control of the Company (as defined in the Indenture), each holder will have the right to require the Company to repurchase all or any part of that holders Notes at a purchase price equal to 101% of the
aggregate principal amount of Notes repurchased plus accrued and unpaid interest, if any, on the Notes repurchased, to (but not including) the date of purchase.
The Indenture, among other things, limits the Companys and its subsidiaries ability to (1) incur liens and (2) enter
into sale and lease-back transactions, and also limits the Companys and the Guarantors ability to merge or dispose of all or substantially all of their assets, in all cases, subject to a number of customary exceptions. The Indenture
provides for customary events of default (subject in certain cases to customary grace and cure