The Pennant Group Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
$PNTG
Medical/Nursing Services
Health Care
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
Date of Report (Date of earliest event reported): August 1, 2024 (July 31, 2024)
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Item 1.01. Entry into a Material Definitive Agreement.
On July 31, 2024, The Pennant Group, Inc. (“Pennant” or the “Company”) entered into an Amended and Restated Credit Agreement (the “Credit Facility”) with Truist Bank, as administrative agent, and certain banks as additional lenders.
The Credit Facility increases Pennant’s existing credit facility by $100.0 million to an aggregate principal amount of up to $250.0 million and extends the maturity date to July 31, 2029. The interest rates applicable to loans under the Credit Facility are, at the Company’s option, equal to either a base rate plus a margin ranging from 0.75% to 1.75% per annum or a rate based on the Secured Overnight Financing Rate (SOFR) plus a margin ranging from 1.75% to 2.75% per annum, based on the ratio of Consolidated Total Net Debt to Consolidated EBITDA (as such terms are defined in the Credit Facility). In addition, the Company will pay an unused line fee on the unused portion of the commitments that ranges from 0.25% to 0.45% per annum, depending on the ratio of Consolidated Total Net Debt to Consolidated EBITDA (as such terms are defined in the Credit Facility).
The Credit Facility contains customary representations, warranties and affirmative covenants. The Credit Facility also contains (A) financial covenants based on (i) the Company’s Leverage Ratio (as such term is defined in the Credit Facility) and (ii) the Company’s Interest/Rent Coverage Ratio (as such term is defined in the Credit Facility) and (B) customary negative covenants, which include (subject to certain negotiated exceptions) limitations on (i) indebtedness, (ii) liens, (iii) significant corporate changes, (iv) dispositions and (v) restricted payments. The Credit Facility also contains customary events of default, such as payment defaults, bankruptcy and insolvency, the occurrence of a defined change in control, certain violations of health care laws, and certain other covenants related to the operation of the Company’s business. If an event of default is not cured, payment under the Credit Facility may be accelerated.
The foregoing description of the Credit Facility is qualified in its entirety by reference to the Amended and Restated Credit Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 2.03. Creation of a Direction Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure of the Credit Agreement contained in Item 1.01 above is hereby incorporated into this Item 2.03 by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |||||||
| Amended and Restated Credit Agreement, dated as of July 31, 2024, by and among The Pennant Group, Inc. and Truist Bank, as administrative agent, and the lenders party thereto | ||||||||
Press Release of the Company dated August 1, 2024. | ||||||||
| 104 | Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document. | |||||||
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.
| Dated: August 1, 2024 | THE PENNANT GROUP, INC. | |||||||||||||
| By: | /s/ BRENT J. GUERISOLI | |||||||||||||
| Brent J. Guerisoli | ||||||||||||||
| Chief Executive Officer | ||||||||||||||