Sonida Senior Living (NYSE: SNDA) has entered into a loan agreement to refinance existing mortgage debt, addressing all of the company’s debt maturities through 2024 and positioning it to grow.
The transaction consists of an $80 million initial term loan and up to $50 million of additional capital, with an uncommitted $40 million accordion provision meant to fund the Dallas-based company’s growth in the future, according to a press release.
The loan is secured by 10 Sonida communities. With the refinance, Sonida’s leaders have reduced the company’s total debt by $38.5 million while also reducing the blended interest rate for the 10 communities by approximately 63 basis points. The refinance also gives the communities opportunities for additional and performance-based interest rate reductions in the future.
Sonida can add on the initial term loan by up to $10 million — two two $5 million payments — and extend its maturity date by one additional year if the company meets certain financial performance metrics and other conditions.
“This refinancing completes the company’s balance sheet transformation, addresses all near-term debt maturities and positions the company for its next phase of growth, which includes a focus on attractive [return on invested] capital expenditures within our existing portfolio as well as acquisitions,” said Sonida President and CEO Kim Lody.
Sonida rebranded to its new name from Capital Senior Living last November. The company’s growth strategy centers on bringing on more communities under third-party management as well as growing its owned portfolio, with a preference for continuum of care properties that include independent living, assisted living and memory care.
Greystone Senior Housing Capital Markets worked with Sonida as exclusive advisor in arranging the financing.
Sonida is the latest publicly traded senior housing company to refinance debt amid the pressures of the Covid-19 pandemic. Last December, Brookdale Senior Living (NYSE: BKD) completed a $100 million refinancing and prepaid substantially all of its remaining 2022 maturities.
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