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Credit Facility and Bank Loans
 9 Months Ended
Sep. 30, 2025
Debt Disclosure [Abstract]  
Credit Facility and Bank Loans
8.
Credit Facility and Bank Loans

The Company’s debt balance consisted of the following (in thousands):

 

 

September 30,
2025

 

 

December 31,
2024

 

Term Loans

 

$

942,209

 

 

$

281,500

 

Revolver Loan

 

 

122,000

 

 

 

146,732

 

Promissory Note Payable

 

 

—

 

 

 

9,875

 

Total debt

 

 

1,064,209

 

 

 

438,107

 

 

 

 

 

 

 

 

Less: Current portion of debt

 

 

(47,865

)

 

 

(9,375

)

Less: Unamortized financing costs

 

 

(14,318

)

 

 

(3,433

)

 

 

 

 

 

 

 

Long-term debt

 

$

1,002,026

 

 

$

425,299

 

 

The estimated fair value of the Company’s long-term debt was determined using Level 2 inputs primarily related to comparable market prices. As of September 30, 2025 and December 31, 2024, the carrying value was not materially different from fair value, as the interest rates on the Company’s debt approximated rates currently available to the Company.

The following are the future commitments, as of September 30, 2025, of the Company’s debt for the years ending December 31 (in thousands):

 

 

Amount

 

2025 (excluding the nine months ended September 30, 2025)

 

$

11,967

 

2026

 

 

47,865

 

2027

 

 

65,814

 

2028

 

 

71,798

 

2029

 

 

89,746

 

Thereafter

 

 

777,019

 

 

 

 

 

Total

 

$

1,064,209

 

Credit Facility

Second Amended and Restated Credit Agreement

On February 26, 2025, the Company entered into the Second Amended and Restated Credit Agreement (the “Second Amended and Restated Credit Agreement,” and the credit facility thereunder, the “Second Amended and Restated Credit Facility”) with Truist Bank, in its capacities as administrative agent for the lenders, issuing bank, swingline lender and a lender, and the banks and other financial institutions from time to time party thereto, to, among other things, amend and restate that certain amended credit agreement, dated June 16, 2021, by and among the Company, Truist Bank, and certain lenders thereto, in its entirety. The Second Amended and Restated Credit Agreement provides for (a) a five-year revolving credit facility (“Revolver Loan”) to the Company of $300.0 million, which includes a letter of credit sub-facility of up to $100.0 million and a swingline loan sub-facility of $25.0 million, (b) a five-year term loan A credit facility (“Term Loan”) to the Company of $250.0 million, and (c) a five-year delayed draw term loan credit facility (“DDTL A”) to the Company of $745.0 million. The term loan A and revolving credit

facilities were used to, among other things, refinance certain existing indebtedness of the Company and certain subsidiaries, pay transaction costs and expenses arising in connection with the Second Amended and Restated Credit Agreement, and provide for working capital needs and other general corporate purposes, and, in addition to the foregoing, the revolving credit facility was used to finance certain future permitted acquisitions and permitted investments and capital expenditures. On July 1, 2025, the Company drew down $707.3 million of the $745.0 million DDTL A to finance the Prospect acquisition and terminated the remainder of the commitment. As a result, the Company had a combined borrowing of $942.2 million on its term loans under the Second Amended and Restated Credit Agreement (the Term Loan and the DDTL A collectively, “Term Loans”). The maturity of the Term Loans remains February 26, 2030.

Amounts borrowed under the Second Amended and Restated Credit Agreement bear interest at an annual rate equal to either, at the Company’s option, (a) the rate for term Secured Overnight Financing Rate (“SOFR”) published by the CME Group Benchmark Administration Limited two days prior to the first day of the applicable interest period, plus a spread of 1.25% to 2.50%, as determined on a quarterly basis based on the Company’s leverage ratio, or (b) a base rate, plus a spread of 0.25% to 1.50%, as determined on a quarterly basis based on the Company’s leverage ratio. As of September 30, 2025, the Company had outstanding borrowings under the Revolver Loan and Term Loans of $122.0 million and $942.2 million, respectively, and the interest rate on the loans was 5.91%.

The Second Amended and Restated Credit Agreement requires the Company to pay a commitment fee of 0.175% to 0.35% multiplied by the daily amount of the unused revolving commitments during the availability period, with such fee determined on a quarterly basis based on the Company’s leverage ratio, and a ticking fee on the delayed draw term loan facility of 0.175% to 0.35% multiplied by the average daily unused portion of delayed draw term loan commitments, with such fee determined on a quarterly basis based on the Company’s leverage ratio. The Company is also required to comply with two financial ratios, each calculated on a consolidated basis. The Company must maintain (commencing with the fiscal quarter ending June 30, 2025) (x) a maximum consolidated total net leverage ratio of not greater than (a) 5.00 to 1.00 as of the last day of each fiscal quarter ending prior to March 31, 2027, and (b) 4.50 to 1.00 as of the last day each fiscal quarter thereafter and (y) a minimum consolidated interest coverage ratio of not less than 2.50 to 1.00 as of the last day of each fiscal quarter. The Second Amended and Restated Credit Agreement requires the Company and its subsidiaries to comply with various affirmative covenants, including, without limitation, furnishing updated financial and other information, preserving existence and entitlements, maintaining properties and insurance, complying with laws, maintaining books and records, and requiring any new subsidiary meeting a materiality threshold specified in the Second Amended and Restated Credit Agreement to become a guarantor thereunder and paying obligations.

The Second Amended and Restated Credit Agreement requires the Company and its subsidiaries to comply with, and to use commercially reasonable efforts to the extent permitted by law to cause certain material associated practices of the Company to comply with, restrictions on liens, indebtedness, and investments (including restrictions on acquisitions by the Company), subject to specified exceptions. The Second Amended and Restated Credit Agreement also contains certain negative covenants binding the Company and its subsidiaries, including restrictions on fundamental changes, dividends and distributions, dispositions, sales and leasebacks, transactions with affiliates, restrictive agreements, use of proceeds, amendments of organizational documents, accounting changes and prepayments, and modifications of subordinated debt.

The Company and its subsidiary, Astrana Health Management, Inc. (“AHM”), have granted the lenders a security interest in all of their assets, including stock and other equity issued by their subsidiaries, pursuant to the Amended and Restated Guaranty and Security Agreement, dated as of February 26, 2025, by and among the Company, as borrower, and AHM, as guarantor, in favor of Truist Bank, which amends and restates that certain guaranty and security agreement dated as of September 11, 2019, in its entirety. The Second Amended and Restated Credit Agreement contains certain customary events of default. If any event of default occurs and continues under the Second Amended and Restated Credit Agreement, the lenders may terminate their commitments, and may require the Company and its guarantors to repay outstanding debt and/or provide a cash deposit as additional security for outstanding letters of credit. In addition, the agent, on behalf of the lenders, may pursue other remedies, including, without limitation, transferring pledged securities of the Company’s subsidiaries in the name of the agent and exercising all rights with respect thereto (including the right to vote and to receive dividends), collect on pledged accounts, instruments and other receivables, and other rights provided by law.

Deferred Financing Costs

The Company paid debt financing costs of $24.2 million related to the issuance of the Second Amended and Restated Credit Agreement and the $707.3 million draw down on the DDTL A. Of the $24.2 million debt financing, $19.2 million was deferred and amortized over the life of the Second Amended and Restated Credit Agreement and $5.0 million was expensed within other expense on the accompanying condensed consolidated statements of income at the time of the amendment.

As of September 30, 2025, unamortized deferred financing costs for the Revolver Loan and Term Loans were $5.5 million, and $14.3 million, respectively. As of December 31, 2024, unamortized deferred financing costs for the Revolver Loan and Term Loan were $0.9 million and $3.4 million, respectively. Deferred financing costs associated with the Term Loans are presented as a direct reduction against the amounts borrowed on the Term Loans and amortized over the life of the loan using the effective interest rate method. Prior to the funding of the DDTL A on July 1, 2025, the associated deferred financing costs were in other assets in the accompanying condensed consolidated balance sheets and amortized using the straight-line method. Deferred financing costs associated with the Revolver Loan are recognized in other assets in the accompanying condensed consolidated balance sheets and amortized over the life of the loans using the straight-line method. Interest expense in the condensed consolidated statements of income includes amortization of deferred debt issuance costs.

Promissory Note Payable

I Health, Inc. Promissory Note Payable – Related Party

The Company entered into a promissory note agreement with I Health in April 2024, which matures on March 31, 2027. As of December 31, 2024, the Company held a principal amount of $9.9 million. On July 1, 2025, the Company paid cash to acquire an additional 37.5% equity interest in I Health by exercising the I Health Call Option (see Note 3 — “Business Combination and Goodwill”), thereby owning 62.5% equity interest and becoming the primary beneficiary with majority controlling interest. As of September 30, 2025, I Health was a consolidated entity of the Company, and the promissory note principal was eliminated upon consolidation.

Effective Interest Rate

The Company’s average effective interest rate on its total debt during the nine months ended September 30, 2025 and 2024, was 6.33% and 7.08%, respectively.