Ascend Wellness said it received commitments for a private placement of $235 million of its 12.75% Senior Secured Notes due 2029 (the "Notes"). The Notes are expected to be issued at a price of 94.75% of face value. The company intends to use the net proceeds of the Notes, together with cash on hand, to prepay $215 million of principal amounts outstanding under its existing term loan. The partial refinancing of the term loan through the issuance of new senior secured notes is a strategic move expected to enhance the Company's financial flexibility and strengthen its balance sheet. The offering is expected to close on or about July 16, 2024, subject to customary closing conditions.
"We are thrilled to refinance $215 million of our existing term loan 13 months before its maturity. This refinancing marks a significant milestone for Ascend. The 5 year notes financing reflects the confidence our lenders have in our business and growth prospects, while enhancing our financial stability and flexibility. The support from a majority of our existing term loan lenders, including all of our four largest lenders, highlights their trust in our strategic vision. The diversification of the new institutional noteholders reflects the significant progress Ascend has made in broadening its investor base and in expanding the prospective audience of future stakeholders. We remain committed to driving value for our shareholders and expanding our footprint," said Ascend CEO John Hartmann.
In connection with the offering, on June 28, 2024, the company entered into an amendment agreement with the required lenders under its term loan, pursuant to which certain terms of the term loan were amended to, among other things, permit the issuance of the motes. The $60 million of principal remaining outstanding under the term loan may be carried through to the existing maturity at 9.5% interest.
