CareMax, Inc. (NASDAQ:CMAX), a provider of nursing and personal care services, entered into a new financing agreement, securing a $20 million credit facility, according to a recent SEC filing. The agreement, finalized on Monday, includes a $4 million term loan and an additional $16 million available through delayed draw term loans.
This strategic financial move comes as the company works to strengthen its balance sheet and ensure liquidity. Under the terms of the new agreement, the $4 million loan was funded immediately, with the remaining $16 million accessible at the lenders' discretion.
The new loans, which are prioritized for repayment above previous borrowings, are set to mature on April 10, 2025, or upon the occurrence of certain liquidity events. CareMax agreed to a substantial interest rate of Term SOFR plus 13.00% and a 6.50% annual fee on the undrawn portion of the loans.
Additionally, the company is obligated to use the net proceeds from Medicare Shared Savings Program receivables to prepay existing loans.
In exchange for the credit, lenders received an upfront fee of 3% of the total commitments, which was added to the loan balance. They will also receive a fee upon repayment to ensure a minimum total cash return of 130%.
The agreement includes financial covenants requiring CareMax to maintain a minimum liquidity level and adhere to budgetary constraints. Furthermore, the amendment extends the waiver of certain events of default through August 15, 2024, with provisions for early termination in specific circumstances.
The full details of the agreement will be disclosed in CareMax's upcoming quarterly report. This financial restructuring is seen as a key step for CareMax in managing its financial obligations and continuing its operations. The information for this article is based on a press release statement.
In other recent news, CareMax, Inc. has amended its existing credit agreement, extending a waiver on certain default conditions through July 10, 2024. This amendment, made with Jefferies Finance LLC and other lenders, provides CareMax with continued financial flexibility.
Despite challenges impacting its adjusted EBITDA, CareMax met its full-year revenue targets and membership goals. To manage its liquidity, the company has initiated cost-saving measures and is considering asset sales.
Analysts from Jefferies and UBS have adjusted their price targets for CareMax, with Jefferies maintaining a Hold rating but lowering the stock's price target to $3.00, while UBS maintained a Neutral rating and revised its price target to $6.40. CareMax's current financial strategy involves evaluating its assets, including its Government ACO business and new centers outside of Florida, to manage its cash flow effectively.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.