Surgery Partners announces $1.38 billion refinancing of credit agreement

Surgery Partners, Inc. (NASDAQ:SGRY), a healthcare services company with a market capitalization of $3 billion and $3.89 billion in total debt, announced Wednesday that it has entered into a second amendment to its credit agreement, providing for a new tranche of term loans totaling $1.383 billion. The agreement, effective the same day, was made with Jefferies Finance LLC and other financial institutions. According to InvestingPro data, the company maintains a healthy current ratio of 1.93, suggesting adequate liquidity despite its substantial debt load.

According to the press release statement, the new loans, referred to as the 2025 Refinancing Term Loans, will replace or refinance in full all existing term loans under the company’s prior credit agreement. The refinancing also covers all existing revolving credit commitments and outstanding revolving loans.

The 2025 Refinancing Term Loans will mature on December 19, 2030. The refinanced revolving credit commitments and loans, now called the 2025 Refinancing Revolving Loans, will mature on December 19, 2028.

The new loans will bear interest at a rate per annum equal to either the forward-looking term rate based on the Secured Overnight Financing Rate (Term SOFR) plus 2.50%, or an alternate base rate plus 1.50%. The alternate base rate is defined as the highest of the prime rate, the federal funds effective rate plus 0.5%, or Term SOFR plus 1.00% (with a minimum of 1.00%).

Repayment of the 2025 Refinancing Term Loans will occur in equal quarterly installments of 0.25% of the original principal amount, starting on or around the last business day of the fiscal quarter ending September 30, 2025. Voluntary prepayments are permitted without premium or penalty, except for a 1.00% call premium on certain repricing events occurring within six months of the amendment’s effective date.

The agreement involves SP Holdco I, Inc. and Surgery Center Holdings, Inc., both wholly-owned subsidiaries of Surgery Partners, Inc., as well as certain subsidiary guarantors.

This information is based on a press release statement included in the company’s filing with the Securities and Exchange Commission.

In other recent news, Surgery Partners reported its second-quarter 2025 earnings, surpassing analysts’ expectations. The company achieved an earnings per share of $0.17, slightly higher than the projected $0.16. Revenue for the quarter was reported at $826 million, exceeding the anticipated $819.45 million. In addition, Benchmark reiterated its Buy rating for Surgery Partners, maintaining a price target of $35.00. The firm highlighted the company’s solid positioning despite its first-quarter 2025 results meeting expectations and maintaining its fiscal year guidance. However, Surgery Partners now anticipates results to fall in the lower half of the projected ranges. Capital deployment has been slower than expected, with only $66 million reached year-to-date against an annual target of at least $200 million. These developments provide investors with key insights into the company’s current financial performance and strategic direction.

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