By Dean Seal
Shares of Enhabit sank after the company said it has entered into a limited waiver under its credit agreement that significantly decreased the funds available from its revolving loans.
The stock fell 29% to an all-time low of $8.31 in early trading. Shares are down by more than a third year-to-date.
The home healthcare services provider disclosed after the bell Monday that it has entered into a limited waiver with Wells Fargo as the administrative agent to other lenders under its credit agreement.
Enhabit said it did so after potentially breaching the agreement’s stipulated total net leverage ratio during the third quarter, and that it wanted to waive compliance with financial covenants for the subsequent required testing of its leverage on Sept. 30.
The waiver requires that, until Enhabit can certify its compliance with those waived financial covenants, the principal amount of revolving loans allowed under the agreement must be decreased to $230 million from $350 million.
Write to Dean Seal at [email protected]
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