Accuray closed a new $40 million term loan with MidCap Financial Trust while concurrently reducing the borrowing facility under its existing revolving loan with MidCap by $20 million. The company intends to use the net proceeds of the term loan, combined with existing cash on hand, to retire the $40 million aggregate principal amount of its 3.50% convertible senior notes and 3.50% Series A convertible senior notes due February 1, 2018.

“This transaction raises an additional $20 million in available funds that we intend to use in conjunction with $20 million on our balance sheet to retire the aggregate principal amount of our February 2018 convertible notes while reducing potential underlying shareholder dilution,” said Kevin Waters, chief financial officer. “We will have lowered our overall convertible note exposure from $215 million two years ago to $85 million after retiring the remaining February 2018 convertible notes. This new agreement with MidCap Financial Trust along with projected operating income gives us the flexibility to achieve our strategic objectives.”

The new term loan bears interest at 90-day LIBOR (subject to a 1.00% floor) plus 675 basis points with a final maturity date of December 2022. The company has the option to draw upon an additional $20 million from MidCap, subject to the terms of the agreement.

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