Alignment Healthcare Issues $330M Convertible Notes

By Tamara Parker • Friday, November 15 10:33 • Permanent Link

Alignment Healthcare, Inc. (NASDAQ: ALHC) has recently announced the issuance of $330 million principal amount of 4.25% convertible senior notes due 2029. The net cash proceeds from the issuance of the notes are expected to be approximately $321.05 million after subtracting fees, discounts, and estimated expenses in connection with the transaction.

The company intends to use the proceeds to lower its cost of capital by repaying the existing term loan facility, which bears interest at SOFR + 6.5%, and for general corporate purposes.

In connection with the issuance of the notes, the placement agent for the notes intends to purchase approximately 3.442 million shares of the company’s common stock in privately negotiated transactions from certain purchasers of the notes through a financial intermediary at a discount to the last reported sale price of the company’s common stock on November 14, 2024.

The conversion price for the notes will initially be approximately $16.04, representing a premium of 25% to the closing price of the company’s common stock on November 14, 2024.

This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful.

The company also plans to file a current report on Form 8-K with the U.S. Securities and Exchange Commission (SEC) regarding this announcement.

Alignment Healthcare, Inc., a consumer brand name of Alignment Healthcare, is championing a new path in senior care that empowers members to age well and live their most vibrant lives. The company is focused on making high-quality, low-cost care a reality for its Medicare Advantage members every day, partnering with nationally recognized and trusted local providers to deliver coordinated care, powered by its customized care model, 24/7 concierge care team, and purpose-built technology, AVA®. The market has reacted to these announcements by moving the company's shares -12.7% to a price of $11.21. Check out the company's full 8-K submission here.

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