Accuray (NSDQ:ARAY) said today that it plans to use the $40 million term loan it just took out from MidCap Financial Trust to buy back some of its senior debt notes and lower the amount of its credit revolver with MidCap.
Sunnyvale, Calif.-based Accuray, which makes radiosurgery devices, said it plans to use the term loan and cash on hand to buy back the same amount in its 3.5% convertible senior notes and 3.5% Series A convertible senior notes due Feb. 1, 2018. The company also plans to cut $20 million from the MidCap revolver, it said.
The interest rate on the term loan is the 90-day London Interbank Offered Rate with a 1.0% floor, plus 675 basis points; it has a final maturity date of December 2022.
“This transaction raises an additional $20 million in available funds that we intend to use in conjunction with $20 million on our balance sheet to retire the aggregate principal amount of our February 2018 convertible notes while reducing potential underlying shareholder dilution,” CFO Kevin Waters said in prepared remarks. “We will have lowered our overall convertible note exposure from $215 million two years ago to $85 million after retiring the remaining February 2018 convertible notes. This new agreement with MidCap Financial Trust, along with projected operating income, gives us the flexibility to achieve our strategic objectives.”
Accuray said it had roughly $94 million in cash & equivalents, restricted cash and investments as of Sept. 30.