Aveanna Healthcare (NASDAQ: AVAH) closes $1.3B debt refinancing
Rhea-AI Filing Summary
Aveanna Healthcare Holdings Inc. amended its first-lien credit agreement through a refinancing and incremental debt transaction. The company’s subsidiary put in place new first-lien term loans totaling $1.325 billion and expanded its revolving credit commitments to $250 million, replacing the prior term and revolving facilities. The new revolving facility matures on September 17, 2030, and the new term loans mature on September 17, 2032, with 1% annual amortization and original issue discount of 99.75% of par.
The term loans and revolver bear interest at the borrower’s option at Term SOFR plus a margin of 3.75% or a base rate plus 2.75%, with potential margin step-downs based on first-lien net leverage. Aveanna used proceeds from the new term loans to fully refinance its existing first-lien term loans and repay its $415 million second-lien term loan, as well as to pay accrued interest and fund working capital and general corporate purposes.
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Insights
Aveanna refinances into a larger first-lien term facility, repays its second-lien debt, and extends maturities to 2030–2032.
Aveanna Healthcare has reworked its debt stack by arranging $1.325 billion in new first-lien term loans and expanding its revolving credit facility to $250 million. This replaces the prior first-lien term and revolver, while keeping broadly similar covenant and documentation terms. The new structure pushes out maturities to September 17, 2030 for the revolver and September 17, 2032 for the term loans, with modest 1% annual amortization and a small original issue discount of 99.75% of par.
Importantly, the company used proceeds from the new term loans to fully repay its $885,950,000 existing first-lien term loans and the $415.0 million second-lien term loan. Moving the second-lien debt into the first-lien term structure consolidates obligations but may also improve the overall cost of capital compared with a typical higher-cost second lien, though the filing only specifies that first-lien pricing is Term SOFR plus a 3.75% margin (or base rate plus 2.75%). Revolver margins and commitment fees are set with leverage-based step-downs, tying pricing to the Consolidated First Lien Net Leverage Ratio as defined in the agreement.
The net impact is a simplified capital structure with longer-dated maturities and a larger revolving liquidity backstop. Actual effects on interest expense and leverage will depend on future SOFR levels, borrowing under the revolver, and the company’s ability to manage its first-lien leverage ratio, which drives pricing step-downs. Subsequent financial reporting for periods after September 17, 2025 will reflect the new interest terms and debt balances, helping investors gauge the ongoing cost of this refinancing.
8-K Event Classification
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FAQ
What major financing change did Aveanna Healthcare (AVAH) report in this 8-K?
Aveanna Healthcare reported that its subsidiary entered into a refinancing amendment to its first-lien credit agreement, establishing new 2025 Term Loans totaling $1.325 billion and expanding its revolving credit commitments to $250 million, replacing the prior first-lien term loan and revolving credit facilities.
How did the Aveanna Healthcare (AVAH) refinancing affect its revolving credit facility?
The refinancing increased the company’s senior secured revolving credit commitments from $170.33 million to $250 million under the new 2025 Refinancing Revolving Credit Facility, with a maturity date of September 17, 2030. A portion of this facility may be used for letters of credit and swingline loans, and undrawn amounts accrue a commitment fee starting at 0.50% per year with leverage-based step-downs.
What are the key terms of Aveanna Healthcare’s new 2025 Term Loans?
The 2025 Term Loans have a total principal balance of $1.325 billion, mature on September 17, 2032, and amortize at 1% per year in equal quarterly installments. They were issued at 99.75% of par and bear interest, at the borrower’s option, at Term SOFR plus 3.75% per year or a base rate plus 2.75% per year.
Did Aveanna Healthcare (AVAH) repay its second-lien term loan as part of this transaction?
Yes. On September 17, 2025, the company’s subsidiary terminated its Second Lien Credit Agreement, which had provided a $415.0 million second-lien term loan. The entire second-lien term loan was repaid using proceeds from the 2025 Incremental Term Loans entered into under the amended first-lien credit agreement.
How is interest determined on Aveanna Healthcare’s new revolving credit facility?
Loans under the 2025 Refinancing Revolving Credit Facility bear interest, at the borrower’s election, at Term SOFR plus 3.75% per year or a base rate plus 2.75% per year while the Consolidated First Lien Net Leverage Ratio is greater than 3.90 to 1.00. The applicable margin may decrease by 0.25% or 0.50% if leverage falls to specified lower levels, as defined in the amended credit agreement.
Were Aveanna Healthcare’s existing credit agreement covenants significantly changed in this refinancing?
The company states that other terms and conditions in the existing credit agreement were not significantly amended as part of the refinancing amendment, indicating that the transaction mainly affects amounts, pricing, and maturities rather than overhauling the covenant framework.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On September 17, 2025 (the "Closing Date"), Aveanna Healthcare LLC, a Delaware limited liability company (the "Borrower"), a wholly owned subsidiary of Aveanna Healthcare Holdings, Inc. (the "Company"), entered into the fourth joinder and twelfth amendment (the "Refinancing Amendment") to its First Lien Credit Agreement, dated as of March 16, 2017 (as further amended, supplemented, or otherwise modified from time to time as of the date hereof, the "Existing Credit Agreement"), among the Company, the borrowing subsidiaries party thereto, the lenders party thereto, Barclays Bank PLC as administrative agent and collateral agent (in such capacities, the "Administrative Agent"), and other agents party thereto (the Existing Credit Agreement, as amended by the Refinancing Amendment, the "Amended Credit Agreement"). The Existing Credit Agreement provided for among other things, a senior secured term loan facility (the "Existing Term Loan Facility") with an outstanding balance as of the Closing Date of $885,950,000 (the "Existing Term Loans") and a $170,330,000 senior secured revolving credit facility (the "Existing Revolving Credit Facility").
The Refinancing Amendment provides for, among other things, the refinancing of the Existing Revolving Credit Facility under the Existing Credit Agreement and incremental revolving loan commitments in an aggregate principal amount of $79,670,000, resulting in total aggregate revolving loan commitments of $250,000,000 (the "2025 Refinancing Revolving Credit Facility"), a portion of which may be used for the issuance of letters of credit and swingline loans. The Refinancing Amendment additionally provides for the refinancing of the Existing Term Loans ("2025 Refinancing Term Loans") under the Existing Term Loan Facility (the "2025 Refinancing Term Facility") and an incremental senior secured term loan facility (the "2025 Incremental Term Facility"), with aggregate commitments increased by $439,050,000 (the "2025 Incremental Term Loans"). Combined, the 2025 Refinancing Term Loans and 2025 Incremental Term Loans aggregate to a total principal balance of $1,325,000,000 (the "2025 Term Loans"). The 2025 Refinancing Revolving Credit Facility and the 2025 Refinancing Term Facility replace the Existing Revolving Facility and the Existing Term Loan Facility, respectively. The maturity date for loans and commitments under the 2025 Refinancing Revolving Credit Facility is September 17, 2030. The maturity date for loans and commitments under the 2025 Refinancing Term Facility is September 17, 2032. Loans under the 2025 Refinancing Term Facility amortize at a rate equal to 1.00% per annum, payable in equal quarterly installments, and were issued with original issue discount at 99.75% of par.
Proceeds from the 2025 Term Loans were used to immediately refinance in full the Existing Term Loans and the Second Lien Term Loan (as defined below in Item 1.02), to pay accrued interest through the Closing Date, and to fund working capital and general corporate purposes.
The 2025 Term Loans under the Amended Credit Agreement will bear interest at a rate equal to, at the election of the Borrower, Term SOFR plus an applicable margin equal to 3.75% per annum or a base rate plus an applicable margin equal to 2.75% per annum. Loans under the 2025 Refinancing Revolving Credit Facility will bear interest at a rate equal to, at the election of the Borrower, Term SOFR, plus an applicable margin equal to 3.75% per annum or a base rate plus an applicable margin equal to 2.75% per annum, so long as the Consolidated First Lien Net Leverage Ratio (as defined in the Amended Credit Agreement) is greater than 3.90 to 1.00 as of the last day of the preceding fiscal quarter, subject to (a) a decrease of 0.25% in the event that, and for so long as, the Consolidated First Lien Net Leverage Ratio is less than or equal to 3.90 to 1.00 and greater than 3.40 to 1.00 as of the last day of the preceding fiscal quarter and (b) a decrease of 0.50% in the event that, and for so long as, the Consolidated First Lien Net Leverage Ratio is less than or equal to 3.40 to 1.00 as of the last day of the preceding fiscal quarter.
The Company will pay certain fees under the Amended Credit Agreement, including (a) a commitment fee of 0.50% per annum on the undrawn portion of the 2025 Refinancing Revolving Credit Facility (subject to a step-downs to 0.375% and 0.250% at the same levels described above), (b) a letter of credit fee equal to the applicable margin per annum over Term SOFR set forth above on the average daily undrawn amount of, plus unreimbursed amounts in respect of disbursements under, letters of credit issued under the 2025 Refinancing Revolving Credit Facility, (c) a fronting fee of 0.125% per annum on the stated amount of all letters of credit issued under the 2025 Refinancing Revolving Credit Facility and (d) customary annual administration fees.
Other terms and conditions in the Existing Credit Agreement were not significantly amended as part of the Refinancing Amendment.
The foregoing description of the Refinancing Amendment does not purport to be complete and is qualified in its entirety by reference to the Refinancing Amendment, including exhibits thereto, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference.
Item 1.02 Termination of a Material Definitive Agreement.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.02.
On September 17, 2025, substantially concurrently with the Refinancing Amendment described in Item 1.01, the Borrower terminated its Second Lien Credit Agreement, dated as of December, 10, 2021, by and among the Company, the Borrower, a syndicate of lending institutions from time to time party thereto, and Barclays Bank PLC, as administrative agent and collateral agent (the "Second Lien Credit Agreement"). The Second Lien Credit Agreement provided for a second lien term loan in an aggregate principal amount of $415.0 million (the "Second Lien Term Loan"), which was secured by a second lien on certain collateral specified therein.
The entirety of the Second Lien Term Loan was repaid with proceeds from the 2025 Incremental Term Loans referenced into Item 1.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 8.01 Other Events.
On September 18, 2025, the Company issued a press release announcing the Refinancing Amendment and the Amended Credit Agreement, and the termination of the Second Lien Credit Agreement. The full text of the press release is included as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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10.1* |
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Fourth Joinder and Twelfth Amendment to First Lien Credit Agreement dated as of September 17, 2025, among Aveanna Healthcare LLC, Aveanna Healthcare Intermediate Holdings LLC, the other credit parties thereto, the lenders party thereto, the L/C issuers party thereto, and Barclays Bank PLC, as administrative agent and swingline lender. |
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Press Release dated September 18, 2025. |
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* Pursuant to item 601(a)(5) of Regulation S-K, certain exhibits and schedules to this agreement have been omitted. The registrant agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted exhibits or schedule upon request by the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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AVEANNA HEALTHCARE HOLDINGS INC. |
Date: |
September 18, 2025 |
By: |
/s/ Matthew Buckhalter |
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Matthew Buckhalter |