Modivcare Announces Successful Refinancing

Rhea-AI Summary

Modivcare (Nasdaq: MODV), a healthcare services company, has refinanced its $500 million senior notes due 2025 with a new $525 million term loan B, maturing in July 2031. The transaction, closed on July 1, 2024, addresses upcoming debt maturities and boosts financial flexibility. Key highlights include strong interest from investors, full redemption of the senior notes, and extending the company's $325 million revolving credit facility by 12 months to February 2028. The minimum liquidity covenant was reduced from $100 million to $75 million. JPMorgan Chase led the refinancing, with KKR Capital Markets as the advisor and Gibson, Dunn & Crutcher providing legal counsel.

Positive

• Successful refinancing of $500 million senior notes with a $525 million term loan B, enhancing financial flexibility.
• Term loan B matures in July 2031, providing long-term stability.
• Strong investor interest, indicating confidence in Modivcare's financial health.
• Extension of $325 million revolving credit facility maturity by 12 months to February 2028.
• Reduction in minimum liquidity covenant from $100 million to $75 million, improving operational flexibility.

Negative

• Increased debt from $500 million to $525 million may raise concerns about long-term financial burden.

Insights

Financial Analyst

Modivcare's recent refinancing is a significant development for investors, primarily due to its impact on the company's debt structure and financial flexibility. The company successfully refinanced $500 million in senior notes due in 2025 with a new $525 million term loan B, extending the maturity to 2031. This move is strategically beneficial as it addresses upcoming debt maturities, reducing near-term financial pressures.

Extending the maturity of a significant portion of the revolving credit facility by 12 months to February 2028 adds to Modivcare's liquidity cushion. Reducing the minimum liquidity covenant from $100 million to $75 million provides further operating flexibility.

For stakeholders, this means the company has more time and resources for strategic investments, potentially improving long-term profitability. The oversubscription of the term loan B indicates strong market confidence in Modivcare's business model and creditworthiness, which is reassuring for both existing and potential investors.

Market Research Analyst

The refinancing move by Modivcare is noteworthy for several reasons. The oversubscription of the new $525 million term loan B reflects strong investor confidence, which can be an indicator of market sentiment towards the company's future prospects. This is particularly important in the healthcare services sector, where financial stability is critical for ongoing operations and growth.

By securing a longer-term loan and extending the revolving credit facility, Modivcare has effectively positioned itself to weather potential market fluctuations and invest in growth opportunities. This is a positive signal that the company is taking proactive steps to manage its financial health, which can attract further investment and strengthen its market position.

DENVER--(BUSINESS WIRE)-- Modivcare Inc. (“Modivcare” or the “Company”) (Nasdaq: MODV), a technology-enabled healthcare services company that provides a platform of integrated supportive care solutions focused on improving health outcomes, today announced the successful refinancing of all outstanding $500 million aggregate principal amount of its 5.875% Senior Notes due 2025 with a new $525 million term loan B, which closed on July 1, 2024. The transaction addressed the Company’s upcoming debt maturities and enhanced financial flexibility to ensure long-term value for our shareholders.

Refinancing Key Highlights:

• Syndicated a new $525 million term loan B, maturing in July 2031.
• Oversubscribed with strong interest from existing and new investors.
• Use of net proceeds to fully redeem all outstanding $500 million aggregate principal amount of the Company’s 5.875% senior unsecured notes due in November 2025.
• Lenders comprising $255 million of the Company’s $325 million revolving credit facility agreed to extend the maturity by an additional 12 months through February 2028 and reduce the minimum liquidity covenant from $100 million to $75 million. The full $325 million revolving credit facility remains accessible for use.

The refinancing was led by JPMorgan Chase Bank, N.A., and respective roles supported by the Company’s bank group. KKR Capital Markets LLC acted as Capital Markets Advisor and Gibson, Dunn & Crutcher LLP served as legal counsel to the Company.

About Modivcare

Modivcare Inc. (Nasdaq: MODV) is a technology-enabled healthcare services company that provides a platform of integrated supportive care solutions for public and private payors and their members. Our value-based solutions address the social determinants of health (SDoH), enable greater access to care, reduce costs, and improve outcomes. We are a leading provider of non-emergency medical transportation (NEMT), personal care services (PCS) and remote patient monitoring (RPM). The Company also holds a minority equity investment in CCHN Group Holdings, Inc. (dba Matrix Medical Network), a leading and independent national provider of in-home comprehensive health assessments. To learn more about Modivcare, please visit www.modivcare.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240702479365/en/

Media

Media.Inquiry@modivcare.com

Investors

Kevin Ellich

Vice President, Head of Investor Relations

Kevin.ellich@modivcare.com

Source: Modivcare Inc.

FAQ

What did Modivcare announce on July 1, 2024?

Modivcare announced the successful refinancing of its $500 million senior notes with a $525 million term loan B.

What is the new maturity date for Modivcare's term loan B?

The new term loan B for Modivcare matures in July 2031.

How did the refinancing transaction affect Modivcare's debt structure?

The refinancing replaced the $500 million senior notes due 2025 with a $525 million term loan B, extending the debt maturity to 2031.

What changes were made to Modivcare's revolving credit facility?

The maturity of Modivcare's $325 million revolving credit facility was extended by 12 months to February 2028, and the minimum liquidity covenant was reduced from $100 million to $75 million.

Who led Modivcare's refinancing transaction?

JPMorgan Chase led Modivcare's refinancing transaction, with KKR Capital Markets acting as the capital markets advisor and Gibson, Dunn & Crutcher providing legal counsel.