CONSHOHOCKEN, Pennsylvania—AdaptHealth Corp., a provider of patient-centered, health care-at-home solutions including home medical equipment, medical supplies and related services, announced that it has closed a $1.1 billion senior secured credit facility, consisting of a $325 million term loan A (the "term loan"), a $325 million delayed draw term loan (the "delayed draw facility") and a $450 million revolving line of credit (revolver).
"The terms of this new credit facility are a direct reflection of the significant progress we have made transforming AdaptHealth's financial and operational profile over the past several years," said Jason Clemens, chief financial officer of AdaptHealth. "The recent upgrades from both S&P and Moody's, combined with the strong support from our banking partners—including a well-oversubscribed syndication process—validate the work our team has done to build a more resilient and higher-performing company. The improved pricing, expanded capacity and extended maturity provide us with the financial foundation to continue delivering value to our patients, partners and shareholders."
Proceeds from the new $325 million term loan were used to fully repay, without penalty, the company's existing term loan. The new $450 million revolver replaces the company's existing $300 million revolving credit facility, which had $100 million drawn at the time the credit facility closed. The increased revolver size provides enhanced liquidity to support the company's ongoing operations.
The $325 million Delayed Draw Facility provides the company with committed capital that may be drawn in up to two advances over a one-year availability period. Proceeds from the delayed draw facility are intended to be used to redeem the company's 6.125% Senior Notes due 2028, once they are callable at par in August 2026, lowering the company’s cost of debt.
The new credit facility delivers improved financial terms:
- Reduced Pricing: The interest rate pricing grid has been significantly reduced from the prior credit facility, with the lowest pricing tier reduced from 1.50% to 1.125% over secured overnight financing rate. The pricing grid is now indexed to the company's total leverage ratio, rewarding continued deleveraging with further reductions in borrowing costs.
- Extended Maturity & Lower Weighted Average Cost of Debt: The new credit facility matures in April 2031, extending the company's debt maturity profile by approximately two years compared to the prior facility and providing a longer runway to execute on its strategic priorities. AdaptHealth said it estimates its weighted average cost of debt will decrease by at least 25bps once the company's 6.125% Senior Notes due 2028 are redeemed.