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Item 2.03
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Creation of a Direct Financial Obligation
or an Obligation Under an Off-Balance Sheet Arrangement of the Registrant.
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Credit Agreement
On August 16, 2021, AdaptHealth LLC (“AdaptHealth”), a
Delaware limited liability company and wholly owned indirect subsidiary of AdaptHealth Corp., entered into that certain Second Amendment
(the “Credit Agreement Amendment”) to the Credit Agreement, dated as of January 20, 2021 (as amended, restated, increased,
extended, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among AdaptHealth, the guarantors
named therein, Regions Bank as administrative agent and collateral agent and the lenders party thereto. The Credit Agreement Amendment
expressly permitted the issuance of the Notes (as defined below) and the prepayment of the outstanding principal amount under the promissory
notes held by affiliates of Assured Investment Management LLC (f/k/a BlueMountain Capital Management, LLC) (the “Preferred Notes”)
with the proceeds of the Notes. In addition, it increased the amount of unencumbered cash that may be used to reduce total indebtedness
in the calculation of certain financial covenants for the fiscal quarters ending September 30, 2021 and December 31, 2021.
The foregoing description of the Credit Agreement Amendment does not
purport to be complete and is qualified in its entirety by the full text thereof, which is filed as Exhibit 10.1 hereto and incorporated
herein by reference.
Notes Offering
On August 19, 2021, AdaptHealth completed its previously announced
offering of $600,000,000 aggregate principal amount of its 5.125% Senior Notes due 2030 (the “Notes”). The Notes were issued
under an indenture (the “Indenture”), dated August 19, 2021, among AdaptHealth, the guarantors party thereto and The Bank
of New York Mellon Trust Company, N.A., as trustee.
The
gross proceeds from the issuance of the Notes were used to repay the Preferred Notes, to repay amounts outstanding under AdaptHealth’s
revolving credit facility, to pay related fees and expenses, and the remainder will be used for general corporate purposes.
The Notes are unsecured senior obligations of AdaptHealth and rank
equally in right of payment to all of its existing and future senior debt, including its existing $350,000,000 aggregate principal amount
of 6.125% senior notes due 2028 and $500,000,000 aggregate principal amount of 4.625% senior notes due 2029, and senior in right of payment
to all of its future subordinated debt. The Notes are effectively subordinated to any of AdaptHealth’s existing and future secured
debt, including under the Credit Agreement, to the extent of the value of the assets securing such debt.
The
Notes are guaranteed by each of AdaptHealth’s existing and future subsidiaries that is a borrower or that guarantees its
obligations under the Credit Agreement or certain other indebtedness, and by AdaptHealth’s direct parent, AdaptHealth Intermediate
Holdco LLC, which also guarantees its obligations under the Credit Agreement. The Notes will mature on March 1, 2030. Interest on the
Notes will be payable on March 1 and September 1 of each year, beginning on March 1, 2022.
The Notes will be redeemable, in whole or in part, at any time on or
after March 1, 2025, and the redemption price for the Notes if redeemed during the 12 months beginning (i) March 1, 2025 is 102.563%,
(ii) March 1, 2026 is 101.281% and (iii) March 1, 2027 and thereafter is 100.000%, in each case together with accrued and unpaid interest,
if any, to, but excluding, the redemption date. AdaptHealth may also redeem some or all of the Notes before March 1, 2025 at a redemption
price of 100% of the principal amount, plus a “make-whole” premium, plus accrued and unpaid interest, if any, to, but not
including, the redemption date. In addition, AdaptHealth may redeem up to 40% of the aggregate principal amount of the Notes before March
1, 2025 with the net cash proceeds from certain equity offerings at a price equal to 105.125% of the principal amount of the Notes, plus
accrued but unpaid interest, if any, to, but not including, the redemption date. Furthermore, AdaptHealth may be required to make an offer
to purchase the Notes upon the sale of certain assets or upon specific kinds of changes of control.
The offering of the Notes was not registered under the Securities Act
of 1933, as amended (the “Securities Act”), or any state securities laws, and the Notes may not be offered or sold in the
United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state
securities laws. The Notes were sold to persons reasonably believed to be “qualified institutional buyers,” as defined in
Rule 144A under the Securities Act, and non-U.S. persons outside the United States under Regulation S under the Securities Act.
The foregoing description of the Indenture does not purport to be complete
and is subject to, and qualified in its entirety by, the full text of the Indenture. A copy of the Indenture is attached as Exhibit 4.1
hereto and is incorporated by reference herein.