Talks between Sound Inpatient Physicians Inc. and a group of its existing lenders — among them Monarch Alternative Capital and PGIM — have advanced toward a roughly $1 billion arrangement that would restructure the healthcare company's outstanding obligations and push back the dates on which that debt comes due.
Insiders familiar with the negotiations told a prominent television network that the refinancing agreement was on course to close within the next seven days.
The arrangement now being structured follows an earlier attempt by the firm to raise sufficient lender commitments through the syndicated loan market, an effort that did not attract the required support. A wider debt-restructuring plan was set in motion by Sound Inpatient Physicians that June, with Barclays Plc brought on to arrange the financing.
Subdued appetite among investors brought the deal to a halt, nudging the company toward renegotiating its financing terms with lenders already on its books. Revised financing terms had put a syndicated loan relaunch by Barclays on the table as an anticipated next step. Debt holders who already had working knowledge of the company's books became the counterparties in a privately arranged refinancing deal that Sound Inpatient Physicians ultimately pursued.
A $1 billion refinancing arrangement, if approved, would push the company's debt obligations out by five years. Knowledgeable insiders described terms under which the fresh debt would price at six percentage points over the relevant benchmark rate.
Funds raised will go toward retiring existing debt obligations, building on a restructuring of those liabilities that wrapped up during 2024. Under that earlier arrangement, PGIM, Monarch Alternative Capital, and a group of additional lenders injected over $100 million in new capital into the business while simultaneously stripping roughly $200 million off its outstanding debt obligations.
Monarch's role in the 2024 deal centred on taking on Sound Inpatient Physicians' outstanding debt obligations, while PGIM moved in the opposite direction — building a larger position by acquiring additional debt at below-par valuations.
Figures pointing to a turnaround in the company's finances have surfaced in the period following the completion of its restructuring work. Sources cited by the broadcaster put the company's EBITDA at above $250 million, a level representing more than twice what it previously stood at.
Pushing debt maturities out by five years would remove the immediate pressure of upcoming repayment deadlines, giving Sound Inpatient Physicians additional time to put its financial position on steadier ground. Private credit providers have moved into territory where syndicated loan markets have struggled to attract sufficient capital — a pattern this anticipated transaction appears to reflect.
