After changing its name to AlerisLife last week, the Newton, Mass.-based company, formerly known as Five Star Senior Living, announced on Monday the closing of a $95 secured term loan millions of dollars.
“The closing of this senior secured term loan provides us with increased liquidity to use at our discretion and additional flexibility for years to come as we execute our strategic business plan,” said President and Chief Executive Officer. AlerisLife executive Katie Potter in a statement.
Midcap Funding VIII Trust is the administrative agent and lender of the loan, of which $63 million is outstanding. The remaining loan proceeds are subject to a $12 million capital improvements holdback; $20 million becomes available after reaching certain financial thresholds by the middle of next year.
The maturity date of the new loan is January 27, 2025. AlerisLife will have the option to extend the loan for one year, twice, if the company meets specific financial thresholds.
The loan is secured by immovable mortgages on 14 retirement homes with a total of 1,477 residential units. The Communities are owned by AlerisLife and operated by Five Star, which is now a division of AlerisLife. AlerisLife said the communities’ gross book value was approximately $152.5 million as of September 30.
“With the recent name change to AlerisLife, we have marked our expansion from primarily a retirement home owner and operator to a more diverse and comprehensive partner, and we plan to scale our business by investing in streams of new and existing revenue, reducing the sales cycle, maximizing our share of customer spend, increasing customer touchpoints and reducing turnover costs,” said Potter. “Following today’s announcement, we feel well capitalized to achieve these goals and maximize shareholder value.”
AlerisLife said it has more than $100 million in unrestricted cash and cash equivalents. In connection with the closing of the new term loan, the company also terminated its existing secured revolving credit facility, which had no borrowings outstanding and was scheduled to mature in June.