Auna Announces the Successful Redemption of Its 6.500% Senior Secured Notes Due 2025 With the Proceeds of Private Placement of Notes

Rhea-AI Summary

Auna S.A. (NYSE: AUNA), a Latin American healthcare company operating in Mexico, Peru and Colombia, has announced the completion of a private placement of USD 57.8 million in 10.000% Senior Secured Notes due 2029. The proceeds were used to fully redeem its existing 6.500% Senior Secured Notes due 2025, at a redemption price of 101.625% plus interest. These Additional 2029 Notes were issued under the same indenture as the company's outstanding USD 253 million 10.000% Senior Secured Notes from December 2023, bringing the total outstanding amount to USD 310.8 million.

Positive

• Successful refinancing of debt extending maturity from 2025 to 2029

Negative

• Higher interest rate on new notes (10.000% vs 6.500% previously)
• Additional cost incurred from early redemption premium of 101.625%

Insights

Fixed Income Analyst

This debt refinancing operation represents a strategic but costly move for Auna. The company is exchanging $57.8M of debt at 6.5% interest for new notes at 10%, a significant 3.5% increase in borrowing costs. While extending maturity from 2025 to 2029 provides better debt structure and liquidity runway, the higher interest rate will increase annual interest expenses by approximately $2M. This refinancing aligns with the broader $310.8M notes due 2029, consolidating the debt structure, but at a premium cost. The 1.625% redemption premium on the 2025 notes also adds roughly $940K in one-time costs. In the current high-rate environment, this reflects the challenging financing conditions for emerging market healthcare companies, even for secured debt.

Emerging Markets Specialist

The refinancing reflects broader challenges in Latin American healthcare financing. Operating across Mexico, Peru and Colombia exposes Auna to multiple currency risks and complex regulatory environments, which likely contributed to the higher coupon rate on the new notes. The consolidation of debt under a single 2029 maturity provides operational flexibility but comes at a notable cost premium. The willingness of investors to participate in this private placement, despite the higher rate, suggests continued market confidence in Auna's regional healthcare platform. However, the increased interest burden may constrain capital allocation for growth initiatives across their tri-country operations in the medium term.

12/23/2024 - 08:36 AM

MONTERREY, Mexico--(BUSINESS WIRE)-- Auna S.A. (NYSE: AUNA) (“Auna” or the “Company”), a Latin American healthcare company with operations in Mexico, Peru and Colombia, announced today the closing of a private placement of USD 57,826,321 aggregate principal amount of its 10.000% Senior Secured Notes due 2029 (the "Additional 2029 Notes"). The proceeds from the Additional 2029 Notes were used to fully redeem the USD 57,826,321 in aggregate principal amount outstanding of its 6.500% Senior Secured Notes due 2025 at a redemption price of 101.625% of the principal amount thereof plus interest to, but excluding, the redemption date.

The Additional 2029 Notes were issued as additional notes under the indenture governing the outstanding USD 253,010,840 million in aggregate principal amount of the Company’s 10.000% Senior Secured Notes due 2029 issued on December 18, 2023. As a result, the total aggregate principal amount outstanding of the Company's 10.000% Senior Secured Notes due 2029 is USD 310,837,161.

About Auna

Auna is a leading horizontally and vertically integrated healthcare platform in Latin America with operations in Mexico, Peru, and Colombia, focusing on high-complexity diseases. Our mission is to transform healthcare by providing access to a highly integrated healthcare offering in the underpenetrated markets of Spanish-speaking Americas. Founded in 1989, Auna has built one of Latin America′s largest modern healthcare platforms that consists of a horizontally integrated network of healthcare facilities and a vertically integrated portfolio of oncological plans and selected general healthcare plans. As of September 30, 2024, Auna’s network included 31 healthcare network facilities, including hospitals, outpatient, prevention and wellness facilities with 2,308 beds, and 1.3 million healthcare plans.

For more information visit www.aunainvestors.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20241218598956/en/

Investor Relations Contact

contact@aunainvestors.com

Source: Auna S.A.

FAQ

What is the total value of Auna's (AUNA) 2029 Senior Secured Notes after the new issuance?

After the new issuance, the total aggregate principal amount of Auna's 10.000% Senior Secured Notes due 2029 is USD 310,837,161.

What was the interest rate difference between Auna's new and old notes in 2024?

The new 2029 Notes carry a 10.000% interest rate, compared to 6.500% on the previous 2025 Notes, representing a 3.5 percentage point increase.

How much did Auna (AUNA) pay to redeem its 2025 Notes?

Auna paid a redemption price of 101.625% of the principal amount plus interest for the 2025 Notes.

What was the value of Auna's Additional 2029 Notes private placement in 2024?

The private placement of Additional 2029 Notes amounted to USD 57,826,321.