Sonida Senior Living announced that it has secured $900 million of committed permanent debt financing, inclusive of a $350 million accordion feature that provides for total potential capacity of up to $1.25 billion, to support the previously announced definitive merger agreement with CNL Healthcare Properties. The financing replaces the existing 364-day $900 million bridge facility provided by RBC Capital Markets and BMO Capital Markets, refinances CHP’s corporate credit facilities, and supersedes Sonida’s existing revolving credit facility at transaction close.
Sonida entered into a new and upsized $375 million four-year secured revolving credit facility with a pricing matrix between S+200 and S+135 basis points depending on leverage, reflecting a significant reduction in borrowing costs compared to the company’s existing credit facility. The financing package also includes two new term loans, a three-year and a five-year facility of $262.5 million each, with a pricing matrix of S+195 to S+130 basis points depending on leverage.
The credit agreement provides for an accordion feature allowing up to $350 million of uncommitted debt capacity for a total capacity of up to $1.25 billion, giving Sonida the ability to continue to support its ongoing acquisition strategy. The facilities will be secured by a first priority pledge of equity interests in the borrowing base assets with a built-in mechanism for the equity pledge to be released and for the facilities to become unsecured based upon compliance with certain covenant requirements.
These newly obtained facilities will reduce the bridge loan facility from $900 million to $300 million and be used to fund the transaction while providing meaningful available liquidity and dry powder to the company for its continued opportunistic acquisition strategy. The remaining bridge loan facility is expected to be replaced through property-level financing.
BMO Capital Markets and RBC Capital Markets serve as joint bookrunners for the new facilities and BMO is serving as the administrative agent. RBC Capital Markets, Citizens Bank, JPMorgan Chase Bank, KeyBanc National Association, and Wells Fargo Bank serve as co-syndication agents. BMO Capital Markets, RBC Capital Markets, Citizens Bank, JPMorgan Chase Bank, KeyBanc Capital Markets, and Wells Fargo Securities serve as joint lead arrangers. First Financial Bank and Morgan Stanley are also participating in the new facilities.
