| Item 2.03 | Creation of a Direct Financial Obligation under anOff-Balance Sheet Arrangement of a Registrant. |
On February 21, 2019, MEDNAX, Inc., a Florida corporation (“Company”), issued an additional $500 million aggregate principal amount of its 6.250% senior unsecured notes due January 15, 2027 (the “Additional Notes”) as additional notes pursuant to the Company’s 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 Company’s subsidiaries as guarantors (the “Guarantors”) and the Trustee. The Additional 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 Additional 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 tonon-U.S. persons pursuant to Regulation S under the Securities Act. The net proceeds received by the Company from the sale of the Additional Notes was approximately $491.7 million after deducting the discounts to the Initial Purchasers and the estimated offering expenses payable by the Company.
The Additional Notes are unsecured senior obligations of the Company. The Company’s obligations under the Additional Notes are guaranteed on a senior unsecured basis by each of the Company’s current and future subsidiaries that is or becomes a guarantor under the Company’s existing senior unsecured credit agreement.
The Additional Notes constitute a single series under the Indenture, together with $500 million of the Company’s 6.250% senior unsecured notes due January 15, 2027 issued on November 13, 2018 (the “Original Notes” and, together with the Additional Notes, the “Notes”), and have identical terms as the Original Notes, except that the Additional Notes were issued (i) at an offering price of 99.75% of the principal amount plus accrued interest from January 15, 2019 until February 21, 2019 and (ii) on a different issue date.
The Notes mature on January 15, 2027. Interest on the Notes will accrue at the rate of 6.250% per annum and will be payable semiannually in cash on January 15 and July 15 of each year, with an initial interest payment on the Additional Notes on July 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:
| | | | |
Period | | Redemption Price | |
2022 | | | 104.688 | % |
2023 | | | 103.125 | % |
2024 | | | 101.563 | % |
2025 and thereafter | | | 100.000 | % |
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 holder’s 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.
