Accuray has closed a $70 million straight debt financing agreement with Cerberus Business Finance, an affiliate of Cerberus Capital Management. The net proceeds of the loan are required to be used, in addition to $30 million of cash funded by Accuray, to retire $100 million of convertible notes at the earlier of August 2016 or when otherwise redeemed.

This financing consists of a $70 million first lien senior secured term loan with a 700 basis point margin and 1% LIBOR floor. The loan will be amortized at 5% annually with final payment due in five years, and is subject to certain maintenance-based covenants. Management currently expects to repay the loan’s principal with cash generated from operations.

Cowen and Company acted as financial advisor to Accuray and served as sole arranger for the transaction.

Sunnyvale, CA-based Accuray is a radiation oncology company that develops, manufactures and sells precise, innovative treatment solutions that set the standard of care with the aim of helping patients live longer, better lives.