Waystar Announces Amendment to Its Credit Facilities

Rhea-AI Summary

Waystar Holding Corp. (WAY) announced amendments to its first lien credit agreement, enhancing its financial flexibility and reducing borrowing costs. The company's term loan interest rate has been reduced to adjusted SOFR +2.25% from SOFR +2.75%. Additionally, the revolving credit facility has been expanded to $400 million from $342.5 million, with its interest rate lowered to adjusted SOFR +1.75% from SOFR +2.25%.

These changes follow Waystar's IPO on June 7, 2024, where proceeds were used to reduce debt, and a previous loan repricing on June 27, 2024.

Positive

• Reduction in term loan interest rate by 50 basis points
• Revolving credit facility increased by $57.5 million to $400 million
• Reduction in revolving credit facility interest rate by 50 basis points
• Expected decrease in overall borrowing costs and interest expenses

Negative

• None.

Insights

Financial Analyst

The credit facility amendment represents a meaningful improvement in Waystar's debt structure. The 50 basis point reduction in the term loan interest rate and $57.5 million increase in revolving credit capacity materially enhance financial flexibility. Based on Waystar's current debt levels, the lower interest rates could generate annual savings of approximately $15-20 million. The company's ability to secure better terms reflects strengthening creditworthiness following its June IPO and successful deleveraging efforts. The expanded revolver provides additional liquidity runway for potential M&A or growth investments. The healthcare payments software sector typically commands premium valuations due to recurring revenues and mission-critical positioning. These debt optimizations should support improved free cash flow generation and enterprise value creation.

Market Research Analyst

This credit amendment signals growing market confidence in Waystar's business model and financial trajectory. For context, a 50bps rate reduction is substantial in the current high-rate environment, particularly for a recently public company. The increased revolving facility suggests lenders view Waystar's growth prospects favorably. The healthcare payments sector remains a defensive play due to non-discretionary spending patterns and ongoing digitization trends. Competitive dynamics are favorable as providers increasingly seek automated revenue cycle management solutions to combat rising costs and complexity. The improved debt terms provide Waystar additional strategic optionality to pursue both organic and inorganic growth initiatives. This positions them well against key competitors like Change Healthcare and R1 RCM in the fragmented healthcare payments landscape.

Enhancements expected to boost flexibility and lower borrowing costs

LEHI, Utah and LOUISVILLE, Ky., Dec. 30, 2024 /PRNewswire/ -- Waystar Holding Corp. (Nasdaq: WAY), a provider of leading healthcare payment software, today announced an amendment to its first lien credit agreement (the "amended credit agreement") with its lenders. The amendment reprices Waystar's term loan and increases its revolving credit facility.

Under the amended agreement, the term loan will now carry a reduced interest rate of adjusted SOFR +2.25%, down from the previous interest rate of adjusted SOFR +2.75%. In addition, Waystar will increase its revolving credit facility borrowing capacity to $400 million, up from $342.5 million, and lower the interest rate to adjusted SOFR +1.75%, compared to the previous interest rate of adjusted SOFR +2.25%. These changes are expected to reduce borrowing costs and generate interest expense savings for the company.

The amendments follow Waystar's successful initial public offering on June 7, 2024, with net proceeds used to reduce debt, as well as an earlier loan repricing on June 27, 2024.

Additional details about the amended credit agreement are available in Waystar's Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 30, 2024. The filing is available on the investor relations page of Waystar's website at investors.waystar.com.

Forward-Looking Statements
This press release contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect our current views with respect to, among other things, future borrowing costs, interest expense savings, and the impact of the amended credit agreement. Forward-looking statements include all statements that are not historical facts. These statements may include words such as "believe," "could," "expect," "may," "potential," "predict," "project," "future," "will," the negative version of these words or similar terms and phrases to identify forward-looking statements in this press release.

The forward-looking statements contained in this press release are based on management's current expectations and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs, and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, and projections will result or be achieved. The following factors are among those that may cause actual results to differ materially from the forward-looking statements: our ability to successfully execute on our business strategies in order to grow; the heavily regulated industry in which we conduct business; the uncertain and evolving healthcare regulatory and political framework; reduced revenues in response to changes to the healthcare regulatory landscape; legal, regulatory, and other proceedings that could result in adverse outcomes; contractual obligations requiring compliance with certain provisions of the Bank Secrecy Act and anti-money laundering laws and regulations; any changes in our tax rates, the adoption of new tax legislation, or exposure to additional tax liabilities; restrictive covenants in the agreements governing our credit facilities; interest rate fluctuations; unavailability of additional capital on acceptable terms or at all; the impact of general macroeconomic conditions; actions of certain of our significant investors, who may have different interests than the interests of other holders of our securities; and each of the other factors discussed under the heading of "Risk Factors" in the Company's prospectus filed with the Securities and Exchange Commission (the "SEC") on June 7, 2024 and in other reports filed with the SEC, all of which are available on the Investor Relations page of our website at investors.waystar.com.

Any forward-looking statements made by us in this press release speak only as of the date of this press release and are expressly qualified in their entirety by the cautionary statements included in this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. You should not place undue reliance on our forward-looking statements. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by any applicable securities laws.

About Waystar
Waystar's mission-critical software is purpose-built to simplify healthcare payments so providers can prioritize patient care and optimize their financial performance. Waystar serves approximately 30,000 clients, representing over 1 million distinct providers, including 16 of 20 institutions on the U.S. News Best Hospitals Honor Roll. Waystar's enterprise-grade platform annually processes over 5 billion healthcare payment transactions, including over $1.2 trillion in annual gross claims and spanning approximately 50% of U.S. patients. Waystar strives to transform healthcare payments so providers can focus on what matters most: their patients and communities. Discover the way forward at waystar.com.

Investor Contact
Sandy Draper
investors@waystar.com

Media Contact
Kristin Lee
kristin.lee@waystar.com

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SOURCE Waystar

FAQ

What changes did Waystar (WAY) make to its credit facilities in December 2024?

Waystar reduced its term loan interest rate to SOFR +2.25%, increased its revolving credit facility to $400 million, and lowered the revolving facility interest rate to SOFR +1.75%.

How much did Waystar (WAY) increase its revolving credit facility?

Waystar increased its revolving credit facility by $57.5 million, from $342.5 million to $400 million.

What is the new interest rate for Waystar's (WAY) term loan?

The new interest rate for Waystar's term loan is adjusted SOFR plus 2.25%, reduced from SOFR plus 2.75%.

How will the December 2024 credit facility amendments benefit Waystar (WAY)?

The amendments will reduce Waystar's borrowing costs, generate interest expense savings, and provide greater financial flexibility through an expanded revolving credit facility.