Silk Road Medical (SILK) Expands Cash Runway by Securing Up to $250 Million in Debt Funding
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Silk Road Medical, Inc. (Company) (Nasdaq: SILK), a company focused on reducing the risk of stroke and its devastating impact, today announced that it has entered into a new five-year loan agreement with Oxford Finance LLC (Oxford) comprising up to $200 million term loan and up to $50 million revolving line of credit. The transaction brings the Company’s total cash, cash equivalents and access to liquidity to approximately $340 million.
“We are extremely pleased to strengthen our capital position with this financing, significantly improving our investment track for growth,” said Lucas Buchanan, CFO and COO of Silk Road Medical. “This agreement provides additional financial flexibility at very favorable cost and terms in the current environment, including a capped interest rate until maturity. We look forward to leveraging this facility to strengthen our organization as we continue to drive adoption of TCAR and advance the less invasive standard of care in stroke prevention.
The Company’s new term loan facility features a five-year maturity date, with four years of interest-only payments and a current coupon of 5.85%, reflecting a base rate of 5.0% plus a 1-month SOFR, subject to a floor of 85 points and a ceiling of 250 basis points. The Company has the option to extend the interest only period and the maturity date for an additional year. The $50 million revolving line of credit also has a five-year term with a base rate of 3.0% plus a 1-month SOFR, subject to a floor of 85 basis points and a cap. of 250 basis points, which will be extended in conjunction with any extension of the term loan maturity date and is subject to the completion of a collateral audit by Oxford before it can be used.
At closing, the Company drew $75 million in funding from the new term loan facility and used $49.2 million of the proceeds to repay its existing credit facility with Stifel Bank. A second tranche of up to $75 million, which may be drawn down in partial tranches, is available through December 31, 2024, solely at the Company’s discretion and not contingent upon financial, commercial or other milestones. A third tranche of up to $50 million is also available through December 31, 2024, subject to the generation of certain rolling revenues relative to the funded term loan amount.
Armentum Partners acted as financial advisor to Silk Road Medical in connection with the transaction. Additional details regarding the foregoing financing are set forth in the company’s current report on Form 8-K, filed today with the SEC.