Filing Overview
Registrant: MultiPlan Corporation; the request metadata identifies Claritev Corp, but the filing names MultiPlan Corporation as the registrant. Form 8-K date: October 29, 2020, filed October 30, 2020. The filing reports new debt issuance, refinancing activity, and an increase in revolving credit commitments.
Key Financial and Capital Structure Details
- MPH Acquisition Holdings LLC, an indirect wholly owned subsidiary, issued $1.3 billion of 5.750% senior notes due November 1, 2028.
- Cash interest is payable semiannually on May 1 and November 1, beginning May 1, 2021.
- The notes were issued at a senior unsecured level and are guaranteed by specified wholly owned domestic restricted subsidiaries. MultiPlan Corporation itself does not guarantee the notes.
- The notes are effectively subordinated to secured indebtedness and structurally subordinated to liabilities of non-guarantor subsidiaries.
- Net proceeds, together with $715 million of cash on hand, were used to redeem the outstanding 7.125% senior notes due 2024, repay $369 million of senior secured term-loan debt, and pay related fees and expenses.
- The senior secured revolving credit facility was increased from $100 million to $450 million.
- If specified revolving facility usage exceeds 35% of total commitments at a fiscal quarter-end, the facility requires compliance with a maximum first-lien secured leverage ratio of 6.75 to 1.00.
- The filing does not provide revenue, net income, cash flow, operating margin, balance-sheet liquidity, or post-transaction total-debt figures.
Material Changes Versus the Prior Capital Structure
- The company replaced 7.125% notes due 2024 with lower-coupon 5.750% notes due 2028, extending the stated maturity and reducing the coupon by 1.375 percentage points.
- The issuer repaid $369 million of term-loan debt and used $715 million of cash in the refinancing transaction.
- Available revolving credit commitments increased by $350 million, although the filing does not state the amount drawn after the amendment.
- The 2024 notes and related indenture obligations were fully redeemed and discharged on October 29, 2020.
Terms, Outlook, and Risks
- Before November 1, 2023, the notes may generally be redeemed at par plus a make-whole premium; up to 40% may be redeemed with equity-offering proceeds at 105.750% of principal.
- Beginning November 1, 2023, redemption prices are 102.875% in 2023, 101.438% in 2024, and 100.000% in 2025 and thereafter, plus accrued interest.
- Specified changes of control may require the issuer to repurchase notes at 101% of principal plus accrued interest.
- Asset-sale proceeds may be required to be reinvested, used to repay certain secured debt, or applied to an offer to purchase notes.
- The indenture restricts dividends, equity repurchases, additional debt, liens, investments, asset dispositions, affiliate transactions, and certain subsidiary payment restrictions, subject to exceptions and qualifications.
- Some covenants may cease to apply if the notes receive investment-grade ratings from both Moody’s and S&P Global Ratings.
- Events of default include nonpayment, certain judgment defaults, guarantee failures, bankruptcy or insolvency, and cross-acceleration.
- The filing contains no earnings guidance, operating outlook, management forecast, or discussion of business performance.
Investor Verification Points
- Verify the post-refinancing debt balance, cash balance, revolver utilization, and resulting interest expense.
- Review the full indenture and credit-facility amendment for covenant definitions, exceptions, collateral, and mandatory repayment provisions.
- Assess the issuer-level guarantee structure and the priority of secured debt relative to the senior unsecured notes.
- Confirm whether the 6.75-to-1.00 first-lien leverage covenant is triggered based on actual revolver and letter-of-credit usage.
- Determine the transaction’s final fees, any redemption premium or make-whole payment, and its effect on liquidity and leverage.