Silk Road Medical, a company focused on reducing the risk of stroke and its devastating impact, entered into a five-year loan arrangement with Oxford Finance comprising up to a $200 million term loan and up to a $50 million revolving line of credit. The transaction brings the company’s total cash, cash equivalents and access to liquidity to approximately $340 million.
“We are tremendously pleased to bolster our capital position through this financing, substantially enhancing our runway to invest for growth,” Lucas Buchanan, CFO and COO of Silk Road Medical, said. “This agreement provides additional financial flexibility at very favorable cost and terms in today’s environment, including a capped interest rate through maturity. We look forward to leveraging this facility to strengthen our organization as we continue driving TCAR adoption and advancing the less invasive standard of care in stroke prevention.”
The company’s new term loan facility includes a maturity date of five years, with four years of interest only payments and a current coupon of 5.85%, reflective of a base rate of 5.0% plus 1-month SOFR, subject to a floor of 85 basis points and a cap of 250 basis points. The company holds the option to extend both the interest only period and maturity date for an additional year. The $50 million revolving line of credit also carries a five-year term with a base rate of 3.0% plus 1-month SOFR, subject to a floor of 85 basis points and a cap of 250 basis points, which will be extended in tandem with any extension of the term loan maturity date and is subject to the completion of a collateral audit by Oxford before it may be utilized.
At close, the company drew $75 million in funding from the new term loan facility and used $49.2 million of the proceeds to retire its existing debt facility from Stifel Bank. A second tranche of up to $75 million, which can be drawn in partial increments, is available through Dec. 31, 2024, solely at the company’s option and not contingent upon financial, commercial, or other related milestones. A third tranche of up to $50 million is also available through Dec. 31, 2024, contingent upon generating certain trailing revenues relative to the funded term loan amount.
Armentum Partners served as financial advisor to Silk Road Medical on the transaction.