HLS Therapeutics announced updates to its credit agreement and senior secured term loan with its existing syndicate of bank lenders co-led by JPMorgan Chase Bank and Silicon Valley Bank. All dollar amounts are stated in U.S. currency.
The maturity date on the senior secured term loan has been extended by one year to August 15, 2024. The required annual amortization of loan value reverts back to 5%, thereby increasing financial flexibility. Interest on the senior secured term loan and revolving facility remain substantially the same level as before.
Total borrowing and unused borrowing capacity remain unchanged. The principal amount remaining on the secured term loan at September 29, 2022 was $91.1 million and there is a $35.0 million revolving facility, of which $10.0 million was drawn in July 2022 to fund a regulatory milestone approval payment. In addition to undrawn revolver facilities, there is an expansion facility through which the Company can access incremental loans, for a maximum additional loan amount of $70.0 million to support growth opportunities. The Company's interest rate swap, in place since October 2019 and covering a majority of the debt outstanding, will remain in place through August 15, 2023, which provides rate stability in a changing rate environment.
"We are pleased with the ongoing support from our lending syndicate," said Tim Hendrickson, CFO of HLS. "This updated credit agreement provides continuity, stability and improved flexibility for the business needs we may encounter as we execute on our strategic priorities."
Under the terms of the updated senior secured term loan, the Company is required to comply with financial covenants related to the maintenance of liquidity and coverage ratios and the lenders continue to have security over substantially all the assets of the Company. The Company may also be required to make additional payments from surplus cash-flow, or the Company could choose to repay some or all of the amount outstanding at any time during the term without penalty.