Alignment Healthcare signs for $250 million in series of term loans

By Mary-Katherine Stinson

Lexington, Ky., Sept. 6 – Alignment Healthcare, Inc., indirect subsidiary Alignment Healthcare USA, LLC and other subsidiaries entered into an agreement with Oxford Finance LLC on Sept. 2 providing a series of term loans of up to $250 million, according to an 8-K filing with the Securities and Exchange Commission.

Alignment received an initial term loan of $165 million on the effective date and may borrow up to an additional $85 million of delayed-draw term loans at its option.

The total proceeds of delayed-draw term loans drawn on or prior to June 30, 2024 may not exceed $50 million unless used for permitted acquisitions and may not exceed $35 million drawn on or after July 1, 2024.

There is a maximum permitted ratio of pro forma debt to trailing twelve-month revenue for the delayed-draw term loans.

Interest on the term loans is a variable rate equal to one-month SOFR subject to a 1% floor plus an applicable margin of 650 basis points.

Each term loan has a maturity date of Sept. 1, 2027.

Prepayment will be either at 101 or 102 if before the second anniversary.

The company is required to prepay outstanding term loans from the net proceeds of certain asset sales.

Financial covenants require the borrowers to maintain minimum liquidity of $23 million and satisfy a maximum permitted ratio of debt to trailing twelve-month revenue.

Oxford Finance LLC is the administrative agent, collateral agent and a lender.

Substantially all the proceeds from the initial term loan were used to repay in full the $159.3 million aggregate principal amount, accrued interest, including payment in kind interest, and fees related to the company’s existing term loan facility with CRG Servicing LLC, as well as certain fees and expenses payable to Oxford.

Remaining borrowings may be used for working capital and general corporate purposes, to finance permitted acquisitions, other investments and capital expenditures and to pay fees, costs and expenses incurred in connection with the loan agreement transaction.

Alignment is an Orange, Calif.-based consumer-centric platform delivering customized health care in the United States through its Medicare Advantage plans.

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