TDR Exclusive: Ascend Wellness CEO On $235M Refinancing
The TDR Three Key Takeaways regarding Ascend Wellness Holdings and Refinancing:
- John Hartmann, CEO of Ascend, discusses the strategic $235M refinancing arrangement.
- “The support from a majority of our existing term loan lenders, including all of our four largest lenders, highlights their trust in our strategic vision,” Hartmann emphasized.
- At the end of the first quarter, that was our fifth consecutive quarter of positive cash from operations,” Hartmann highlighted.
Ascend Wellness Holdings, Inc. (CSE: AAWH.U, OTCQX: AAWH), a multi-state, vertically integrated cannabis operator, yesterday made headlines with its announcement of a $235 million private placement of 12.75% Senior Secured Notes due 2029. This strategic financial arrangement, aimed at refinancing existing debt, marks a significant milestone in Ascend’s growth trajectory. John Hartmann, CEO of Ascend Wellness, provided detailed insights into this development during TDR MSOS Monday Trade to Black Podcast.
Hartmann highlighted the importance of this refinancing initiative, stating, “We are thrilled to refinance $215 million of our existing term loan 13 months before its maturity. This refinancing marks a significant milestone for Ascend.” The new senior secured notes are expected to enhance the company’s financial flexibility by replacing higher-cost debt with more manageable terms.
The refinancing effort underscores the strong relationships Ascend has cultivated with its lenders. “The support from a majority of our existing term loan lenders, including all of our four largest lenders, highlights their trust in our strategic vision,” Hartmann emphasized. This trust is further reflected in the favorable terms of the new notes, providing Ascend with a more sustainable financial structure.
The new notes, carrying an interest rate of 12.75% per annum and maturing on July 16, 2029, offer Ascend a five-year runway to focus on its growth objectives without the immediate pressure of refinancing. Hartmann noted, “The 5-year notes financing reflects the confidence our lenders have in our business and growth prospects, while enhancing our financial stability and flexibility.”
Ascend plans to use the net proceeds from the offering, along with cash on hand, to prepay $215 million of its existing term loan. The remaining $60 million of the term loan will be carried through to its existing maturity at a lower interest rate of 9.5%. “The partial refinancing of the Term Loan through the issuance of new senior secured notes is expected to enhance the Company’s financial flexibility and strengthen its balance sheet,” Hartmann explained.
“We remain committed to driving value for our shareholders and expanding our footprint,” Hartmann stated. The successful refinancing allows Ascend to focus on its core business operations and expansion plans across key markets, including Illinois, Maryland, Massachusetts, Michigan, Ohio, New Jersey, and Pennsylvania.”
The offering follows Ascend’s announcement of its fifth consecutive quarter of generating cash from operations, signaling strong financial health. “At the end of the first quarter, that was our fifth consecutive quarter of positive cash from operations,” Hartmann highlighted. This operational success has undoubtedly contributed to the confidence shown by existing and new institutional noteholders in Ascend’s long-term viability.
