AxoGen (AXGN) Enters Debt Refi

October 26, 2016 7:46 AM EDT
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AxoGen, Inc. (Nasdaq: AXGN) announced that it has completed the refinancing of its existing debt agreement with a new facility from MidCap Financial (“MidCap”). The new facility consists of a $21.0 million term loan and a $10.0 million revolving line of credit, of which $4.0 million has been drawn. AxoGen continues to have a total debt balance of $25 million after closing. The revolving line of credit may be increased up to $15 million at a later date at the Company’s request and with approval of Midcap.

“We are pleased to announce this debt financing with MidCap, a leading financing partner in the healthcare space,” commented Peter J. Mariani, AxoGen’s Chief Financial Officer. “Following our recent equity raise of $18.6 million, this new and lower cost debt facility further strengthens our balance sheet as we continue to drive growth in this emerging peripheral nerve repair market.”

The facility carries a 54-month term with interest only payments on the term loan for the first 24 months. The interest rate on the term loan is 8.0% plus the greater of LIBOR or 0.5%, which at the closing resulted in a rate of 8.5%. Borrowings under the revolving line of credit bear interest of 4.5% plus the greater of LIBOR or 0.5% which, at the closing resulted in a rate of 5.0%. The company estimates annual interest cost savings of the new facility will be at least $1.5 million compared to the previous debt facility. The facility requires the company to maintain certain minimum net revenue requirements.

Proceeds from this financing were used to repay and retire the company’s existing $25.0 million term loan and revenue royalty interest agreement with Three Peaks Capital S.a.r.l, an indirect wholly-owned subsidiary of Oberland Capital Healthcare Master Fund, LP.

Additional details regarding this financing will be available in the Company’s Current Report on Form 8-k to be filed with the Securities and Exchange Commission.

Credo180, LLC served as financial advisor to AxoGen for this transaction.

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