ATI Physical Therapy swaps loan for PIK exchangeables and preferreds

By Devika Patel

Knoxville, Tenn., June 21 – ATI Physical Therapy, Inc. completed a transaction support agreement to increase its liquidity and financial flexibility on June 15, according to an 8-K filed with the Securities and Exchange Commission.

Under the agreement, ATI will obtain a $25 million delayed-draw facility in the form of new second-lien PIK exchangeable notes and exchange $100 million of first-lien term loans into new second-lien PIK exchangeable notes, among other things.

On the closing date, the company exchanged $100 million of the term loans under the credit agreement held by certain preferred equity holders for $100 million of a new stapled security, comprised of second-lien PIK convertible notes and series B preferred shares, which provide holders with voting rights on an as-converted basis at an initial price per share equal to $12.87; and issued to the purchasers $3,243,302.02 of notes and preferreds.

Noteholders will also receive additional notes upon the in-kind payment of interest on the notes.

The notes are convertible into common shares at an initial fixed conversion price of $12.50 per share.

ATI is a Bolingbrook, Ill.-based outpatient physical therapy provider.

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