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New York-headquartered cannabis company Ascend Wellness Holdings, Inc. (CSE:AAWH) (OTCQX:AAWH) said on Thursday that it has closed its previously announced private placement of $235 million of 12.75% senior secured notes due 2029.
The company said in a press release the notes were issued at a price of 94.75% of face value.
The notes, which mature on July 16, 2029, are senior secured obligations of the company and bear interest at a rate of 12.75% per annum, payable semi-annually in arrears until their maturity date, unless earlier redeemed or repurchased by their terms.
Seaport Global Securities LLC acted as the lead financial advisor and sole placement agent for the Notes.
Ascend used the net proceeds of the notes, together with cash on hand, to prepay $215 million of principal amounts outstanding under its existing term loan.
The partial refinancing of the term loan through the issuance of new senior secured notes is a strategic move expected to enhance the company’s financial flexibility and strengthen its balance sheet.
John Hartmann, CEO of Ascend, praised the move earlier this month.
"We are thrilled to refinance $215 million of our existing term loan 13 months before its maturity,” Hartmann said. “This refinancing marks a significant milestone for Ascend. The 5-year note financing reflects the confidence our lenders have in our business and growth prospects while enhancing our financial stability and flexibility. The support from a majority of our existing term loan lenders, including all of our four largest lenders, highlights their trust in our strategic vision. The diversification of the new institutional noteholders reflects the significant progress Ascend has made in broadening its investor base and in expanding the prospective audience of future stakeholders. We remain committed to driving value for our shareholders and expanding our footprint."
The remaining $60 million in principal amounts outstanding under the term loan will continue at the current interest rate of 9.5% and can be repaid at par after February 27, 2025, through August 27, 2025.
Ascend Wellness' shares traded 5.40% higher at $0.859 per share after the market close on Wednesday afternoon.
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