Private equity backers to Symplr Software have agreed to inject the healthcare software provider with approximately $175 million of preferred equity as part of a comprehensive debt restructuring. According to reports from Bloomberg, the deal involves multiple creditor groups and creates various debt securities while extending repayment timelines. The company, backed by Clearlake Capital Group and Charlesbank Capital Partners, has agreed to terms with various creditor groups and will seek broader support for the restructuring plan.
Second-lien lenders, including Ares Capital Corp., plan to provide $103.5 million of fresh funding structured as a first-out second-lien loan. As reported by Bloomberg, this loan ranks ahead of other second-lien debt and will be open to all junior-ranking lenders. Existing second-lien lenders will receive a 100 basis points coupon bump, with the loan carrying a mix of cash and payment-in-kind interest. Additionally, first-lien term loan lenders due in 2027 will see a 100-basis-point coupon bump in exchange for extending maturity by three years.
According to Bloomberg data, Symplr's roughly $1.2 billion first-lien term loan was recently quoted at 71.4 cents on the dollar, down from around 78 cents on March 4 and as much as 86.5 cents on January 5. The company's nearly $290 million second-lien term loan due in 2028 was quoted at 70 cents. Investors who don't participate in the exchange will see their debt fall to the bottom of Symplr's capital structure and lose creditor safeguards known as covenants.
As reported by Bloomberg, the deal follows months of talks with lenders over Symplr's debt makeup, which continues to trade at distressed levels since concerns over artificial intelligence's growth impact hit scores of software companies earlier this year. Moody's Ratings downgraded the company and its loans deeper into junk in July due to increased likelihood of restructuring. Symplr's loans were among the biggest markdowns by Ares's private credit fund in the first quarter, highlighting the challenging market conditions facing the healthcare software sector.
