NeueHealth Secures up to $150 Million in New Term Loan Facility with Hercules Capital

Rhea-AI Summary

NeueHealth has secured a term loan facility for up to $150 million with Hercules Capital, significantly strengthening its balance sheet. This financing aims to advance NeueHealth's differentiated care model and support the company's strategic priorities in 2024 and beyond. The loan will help NeueHealth deliver value-driven, consumer-centric care across the ACA Marketplace, Medicare, and Medicaid. Both companies expressed optimism about the partnership's potential to drive value for payors, providers, and consumers.

Positive

• NeueHealth secures a $150 million term loan facility with Hercules Capital.
• Funding strengthens balance sheet and supports strategic priorities for 2024.
• Loan supports value-driven, consumer-centric care across the ACA Marketplace, Medicare, and Medicaid.

Negative

• None.

Insights

Financial Analyst

NeueHealth's new term loan facility with Hercules Capital, worth up to $150 million, significantly bolsters the company's financial standing. This influx of capital enhances NeueHealth's liquidity, affording it greater flexibility to pursue strategic initiatives.

For retail investors, this development suggests NeueHealth is reinforcing its balance sheet, which could be an indicator of both stability and growth potential. A strengthened balance sheet often translates to a better ability to weather industry fluctuations and seize new opportunities. However, it is essential to scrutinize the terms of the loan and any covenants that could impact operational flexibility. The upcoming Form 8-K filing will provide the specifics necessary to evaluate these aspects.

Short-term, this loan improves NeueHealth's liquidity, offering a buffer against unexpected expenses or opportunities requiring quick capital. In the long-term, this capital could facilitate investments in technology, expansion of services, or strategic acquisitions, all of which might drive revenue growth and enhance shareholder value.

It’s worth noting that Hercules Capital's backing implies a vote of confidence from a well-regarded financial partner, potentially improving market perception and investor confidence in NeueHealth's business model and future prospects.

Healthcare Market Analyst

The move to secure substantial financing aligns with NeueHealth’s goal of advancing its value-based care model. Value-based care, which emphasizes delivering better health outcomes while controlling costs, is increasingly becoming a key focus in the healthcare industry. By securing this loan, NeueHealth is positioned to potentially take a leading role in this transition.

For investors, this signals that NeueHealth is preparing to scale its operations and expand its market reach. The influx of capital will likely be used to enhance their service offerings and infrastructure, ultimately aiming to make personalized care more accessible and affordable. This strategic orientation aligns with broader industry trends like the shift towards value-based care and increased consumer demand for cost-effective healthcare solutions.

However, investors should monitor how effectively NeueHealth utilizes this funding to drive growth and operational improvements. Execution risk remains a factor, as strategic initiatives will need to translate into tangible improvements in financial performance and customer satisfaction.

• Significantly strengthens balance sheet, positioning Company for long-term, sustainable growth
• Underscores the value Company delivers to payors, providers, and consumers across the industry

DORAL, Fla.--(BUSINESS WIRE)-- NeueHealth, Inc. (“NeueHealth” or the “Company”) (NYSE: NEUE), the value-driven healthcare company, today announced that it entered into a secured loan facility for up to $150 million with Hercules Capital, Inc. (NYSE: HTGC) ("Hercules").

“This financing puts us in a strong position to advance our differentiated care model and take the lead as the industry continues to shift to value-based care,” said Mike Mikan, President and CEO of NeueHealth. “We have established longstanding relationships with payors, providers, and consumers across the industry, and we look forward to continuing to build on our success as we make personalized care more accessible and affordable for all.”

The financing, which will be used to support NeueHealth’s strategic priorities in 2024 and beyond, further solidifies the Company’s capital position, enabling it to focus on delivering value-driven, consumer-centric care to all populations.

“Hercules is pleased to support NeueHealth. We see significant opportunities in NeueHealth’s ability to drive value for payors and providers and deliver high-quality care to consumers across the ACA Marketplace, Medicare, and Medicaid,” said Tom Hertzberg, Managing Director at Hercules. “NeueHealth is driving value in healthcare for all, and we are thrilled to be their financial partner,” added Mike McMahon, Director at Hercules.

More information regarding the financing and the key terms will be included in a Form 8-K to be filed by NeueHealth with the Securities and Exchange Commission.

Moelis & Company LLC acted as exclusive placement agent and capital markets advisor and Simpson Thacher & Bartlett LLP served as legal advisor to the Company.

About NeueHealth

NeueHealth is a value-driven healthcare company grounded in the belief that all health consumers are entitled to high-quality, coordinated care. By uniquely aligning the interests of health consumers, providers, and payors, NeueHealth helps to make healthcare accessible and affordable to all populations across the ACA Marketplace, Medicare, and Medicaid. NeueHealth delivers high-quality clinical care to over 460,000 health consumers through owned clinics and unique partnerships with over 3,000 affiliated providers. We also enable independent providers and medical groups to thrive in performance-based arrangements through a suite of technology and services scaled centrally and deployed locally. We believe our value-driven, consumer-centric care model can transform the healthcare experience and maximize value across the healthcare system. For more information, visit: www.neuehealth.com.

Forward-Looking Statements

Statements made in this release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as “anticipate,” “expect,” “plan,” “believe,” “intend,” “project,” “forecast,” “estimates,” “projections,” “outlook,” “ensure,” and other similar expressions. These forward-looking statements include any statements regarding our plans, expectations and financial guidance. Such forward-looking statements are subject to various risks, uncertainties and assumptions. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Factors that might materially affect such forward-looking statements include: our ability to continue as a going concern; our ability to comply with the terms of our credit facility or any credit facility into which we enter in the future; our ability to receive the remaining proceeds from the sale of our Medicare Advantage business in California in a timely manner; our ability to obtain any short or long term debt or equity financing needed to operate our business; our ability to quickly and efficiently complete the wind down of our remaining IFP and MA businesses, including by satisfying liabilities of those businesses when due and payable; potential disruptions to our business due to corporate restructuring and any resulting headcount reduction; our ability to accurately estimate and effectively manage the costs relating to changes in our businesses offerings and models; a delay or inability to withdraw regulated capital from our subsidiaries; a lack of acceptance or slow adoption of our business model; our ability to retain existing consumers and expand consumer enrollment; our and our care partner’s abilities to obtain and accurately assess, code, and report risk adjustment factor scores; our ability to contract with care providers and arrange for the provision of quality care; our ability to obtain claims information timely and accurately; the impact of any pandemic or epidemic on our business and results of operations; the risks associated with our reliance on third-party providers to operate our business; the impact of modifications or changes to the U.S. health insurance markets; our ability to manage any growth of our business; our ability to operate, update or implement our technology platform and other information technology systems; our ability to retain key executives; our ability to successfully pursue acquisitions and integrate acquired businesses; the occurrence of severe weather events, catastrophic health events, natural or man-made disasters, and social and political conditions or civil unrest; our ability to prevent and contain data security incidents and the impact of data security incidents on our members, patients, employees and financial results; our ability to comply with requirements to maintain effective internal controls; our ability to adapt to mitigate risks associated with our ACO Reach businesses, including any unanticipated market or regulatory developments; and the other factors set forth under the heading “Risk Factors” in the Company’s reports on Form 10-K, Form 10-Q, and Form 8-K (including all amendments to those reports) and our other filings with the SEC. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or changes in our expectations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240624949891/en/

Investor Contact:

IR@neuehealth.com

Media Contact:

media@neuehealth.com

Source: NeueHealth

FAQ

What is the new loan facility secured by NeueHealth?

NeueHealth secured a term loan facility for up to $150 million with Hercules Capital.

How will NeueHealth use the $150 million loan from Hercules Capital?

The loan will support NeueHealth's strategic priorities and advance its differentiated care model.

What sectors will benefit from NeueHealth's new funding?

The funding will enhance care across the ACA Marketplace, Medicare, and Medicaid.

Which company provided the $150 million loan to NeueHealth?

Hercules Capital provided the $150 million loan to NeueHealth.

What is the impact of the new loan on NeueHealth's balance sheet?

The new loan significantly strengthens NeueHealth's balance sheet.