Healthcare equipment manufacturer Accuray has refinanced $100 million of convertible debt with a $70 million senior secured loan from Cerberus.
The facility carries a margin of 700bps and a 1 percent Libor floor. The five-year term loan amortises by 5 percent a year, the NASDAQ-listed cancer treatment firm said in a statement.
The debt, provided by Cerberus Capital Management affiliate Cerberus Business Finance, replaces convertible notes that would have diluted the firm’s equity value had they been converted into stock.
“In today’s volatile financial markets, the ability to secure this type of capital financing with Cerberus and eliminate the potential issuance of approximately 10.6 million shares of our common stock demonstrates our progress in commercial execution and shows confidence in our long-term financial plans and stability,” said Joshua Levine, president and chief executive officer of Accuray.
Accuray said it expects to be able to repay the new loan from operating cashflows. The $100 million of convertible notes will be repaid with $30 million in cash by the company, with the Cerberus loan covering the rest.
Cowen and Company acted as financial advisor for Accuray on the transaction.
Accuray develops, manufactures and sells radiation therapy and radiosurgery treatments.
Cerberus Capital Management has more than $28 billion in assets under management across four strategies: distressed securities and assets; control and non-control private equity; commercial mid-market lending and real estate-related investments.