Sotera Health (SHC) amends First Lien Credit Agreement and reprices term loans
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Sotera Health Company entered into Amendment No. 7 to its First Lien Credit Agreement, under which 2026 Refinancing Term Lenders will provide term loans to Sotera Health Holdings, LLC in an aggregate principal amount of $1,415,914,725.62. The amendment mainly reprices existing debt by reducing the interest rate spread by 0.25% across term loans under the facility.
The repriced term loans will bear interest at Adjusted Term SOFR plus 2.25%, with an option to elect Alternate Base Rate plus 1.25% or Adjusted Daily Simple SOFR plus 2.25%. The loans carry a 1.00% soft call premium for certain repricing transactions within six months of the amendment’s effective date, amortize at 1.00% per year, and mature on May 30, 2031.
Positive
- None.
Negative
- None.
8-K Event Classification
3 items: 1.01, 2.03, 9.01
3 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Repriced term loans principal: $1,415,914,725.62
Spread reduction: 0.25%
SOFR margin: 2.25%
+5 more
8 metrics
Repriced term loans principal
$1,415,914,725.62
Aggregate principal amount of Repriced Term Loans to SHH
Spread reduction
0.25%
Interest rate spread reduction across term loans
SOFR margin
2.25%
Margin over Adjusted Term SOFR on repriced term loans
Alternate Base Rate margin
1.25%
Interest margin if Alternate Base Rate is elected
Daily Simple SOFR margin
2.25%
Interest margin if Adjusted Daily Simple SOFR is elected
Soft call premium
1.00%
Premium on certain repricing transactions within six months
Amortization rate
1.00% per annum
Annual amortization of Repriced Term Loans
Loan maturity
May 30, 2031
Maturity date of Repriced Term Loans
Key Terms
First Lien Credit Agreement, Adjusted Term SOFR, Alternate Base Rate, Adjusted Daily Simple SOFR, +2 more
6 terms
First Lien Credit Agreement financial
"Amendment No. 7 to the First Lien Credit Agreement dated as of December 13, 2019"
A first lien credit agreement is a loan contract that gives the lender the top legal claim on a borrower's specific assets if the borrower defaults, like a mortgage that gets paid before others when a house is sold. It matters to investors because holders of first-lien debt are paid before other creditors and shareholders in a distress situation, which lowers their risk and can affect a company's borrowing costs, financial flexibility, and the value of other securities.
Adjusted Term SOFR financial
"applicable interest rate margin equal to Adjusted Term SOFR plus 2.25%"
Adjusted term SOFR is a forward‑looking interest benchmark based on short‑term overnight Treasury repo rates, with a small extra amount added to reflect differences from legacy rates. Think of it as a quoted price that has been nudged to make payments comparable to older benchmarks; it matters to investors because it directly influences borrowing costs, bond yields and cash‑flow forecasts, affecting valuations and hedging outcomes.
Alternate Base Rate financial
"optionality for the Company to elect Alternate Base Rate plus 1.25%"
Adjusted Daily Simple SOFR financial
"or Adjusted Daily Simple SOFR plus 2.25% (each as defined in the Credit Agreement)"
amortize financial
"The Repriced Term Loans amortize at a rate of 1.00% per annum"
To amortize means to spread the repayment of a debt or the recognition of a cost over a series of scheduled payments or accounting periods. For investors, amortization shows how much of a loan payment reduces principal versus interest or how a one-time expense is gradually charged to profits, helping reveal a company’s true cash obligations and ongoing earnings power—think of paying off a big purchase with a fixed monthly plan so the cost isn’t all felt at once.
FAQ
What did Sotera Health Company (SHC) change in its credit agreement?
Sotera Health Company entered Amendment No. 7 to its First Lien Credit Agreement, repricing term loans and adjusting interest margins, soft call provisions, amortization rate, and maturity for its existing term loan facility.
How large are the repriced term loans in Sotera Health’s amendment?
The repriced term loans total an aggregate principal amount of $1,415,914,725.62. These loans are provided to Sotera Health Holdings, LLC by the 2026 Refinancing Term Lenders under the amended First Lien Credit Agreement.
How did Sotera Health adjust interest rates on its term loans?
The amendment reduces the interest rate spread by 0.25% across term loans. The repriced loans now bear interest at Adjusted Term SOFR plus 2.25%, with alternatives of Alternate Base Rate plus 1.25% or Adjusted Daily Simple SOFR plus 2.25%.
When do Sotera Health’s repriced term loans mature?
The repriced term loans under the amended First Lien Credit Agreement mature on May 30, 2031. They also amortize at a rate of 1.00% per annum over the life of the facility.
Which lenders and agent are involved in Sotera Health’s amended facility?
The repriced term loans are provided by 2026 Refinancing Term Lenders, with JPMorgan Chase Bank, N.A. serving as first lien Administrative Agent under the amended First Lien Credit Agreement.