Advocat inks credit line

Advocat this afternoon announced it has a new $15 million, three-year revolving credit facility that replaces a bank revolver that would have expired in August.

The Brentwood-based company already has used $3.2 million of its new cash, which is secured by accounts receivable and to pay off an existing bank term loan. The new revolver is secured by accounts receivable and carries an interest rate of at least 6.5 percent or the bank's prime lending rate.

"As a result of changes in banking industry business practices since we entered into our previous credit facility in 2007, the new revolving credit facility has a higher interest rate than the existing credit facility," said CEO Will Council. "However, as a result of the significant reduction in our overall debt and the decrease in letters of credit required as a result of our improved debt level, the Company's interest expense is expected to decrease by approximately $200,000 during 2010 compared to 2009."

Shares of Advocat (Ticker: AVCA) rose 1.2 percent Wednesday to $6.70. They're down13 percent year to date.