InnovAge Holding Corp.INNV
InnovAge Holding Corp. Debt Disclosure
Long-term Debt
The components of our long-term debt are as follows:
| June 30, 2025 | June 30, 2024 | ||||||||||
| in thousands | |||||||||||
| Senior secured borrowings: | |||||||||||
| Term Loan Facility | $ | 60,000 | $ | 63,750 | |||||||
| Convertible term loan | — | 2,239 | |||||||||
| Total debt | 60,000 | 65,989 | |||||||||
| Less unamortized debt issuance costs | 286 | 716 | |||||||||
| Less current maturities | 2,250 | 3,795 | |||||||||
| Noncurrent maturities | $ | 57,464 | $ | 61,478 | |||||||
As of June 30, 2025, the SH1 Convertible Term Loan, which was previously classified within Current portion of long-term debt and Long-term debt, net of debt issuance costs, has been transferred to Liabilities held for sale.
Credit Agreement
On March 8, 2021, the Company entered into a credit agreement (as amended, the “Credit Agreement”) that replaced its prior credit agreement. As of June 30, 2025, the Credit Agreement consisted of a senior secured term loan (the “Term
Loan Facility”) of $75.0 million principal amount and a revolving credit facility (the “Revolving Credit Facility”) of $100.0 million maximum borrowing capacity.
Subsequent Event
On August 8, 2025, the Company entered into Amendment No. 2 to the Credit Agreement. Amendment No. 2 refinanced the Term Loan Facility with a $50.7 million term loan (the “Term Loan A Facility”), renewed the commitments with respect to the Revolving Credit Facility and extended the maturity date of both the Term Loan A Facility and the Revolving Credit Facility to August 8, 2028 from March 8, 2026.
Terms of the Credit Agreement
Borrowing capacity under the Revolving Credit Facility is subject to (i) any issued amounts under our letters of credit, which as of June 30, 2025 was $5.2 million, and (ii) applicable covenant compliance restrictions and any other conditions precedent to borrowing. Loans under the Credit Agreement are secured by substantially all of the Company’s assets. Principal on the Term Loan Facility and Term Loan A Facility is paid each calendar quarter in an amount equal to 1.25% of the initial term loan on closing date.
Outstanding principal amounts under the Credit Agreement accrue interest at a variable interest rate. As of June 30, 2025 and 2024, the interest rate on the Term Loan Facility was 6.13% and 7.18%, respectively. Under the terms of the Credit Agreement, the Revolving Credit Facility fee accrues at 0.25% of the average daily unused amount and is paid quarterly. As of June 30, 2025, we had no borrowings outstanding, $5.2 million of letters of credit issued, and $94.8 million of remaining capacity under the Revolving Credit Facility.
The Credit Agreement requires the Company to meet certain operational and reporting requirements, including, but not limited to, a secured net leverage ratio. Additionally, annual capital expenditures and permitted investments, including acquisitions, are limited to amounts specified in the Credit Agreement. The Credit Agreement also provides certain restrictions on dividend payments and other equity transactions and requires the Company to make prepayments under specified circumstances. The Company was in compliance with the covenants of the Credit Agreement as of June 30, 2025 and 2024.
The deferred financing costs of $2.0 million are amortized over the term of the underlying debt and unamortized amounts have been offset against long-term debt in the consolidated balance sheets. Total amortization of deferred financing costs was $0.4 million and $0.4 million for the years ended June 30, 2025 and 2024, respectively.
Convertible Term Loan
On June 29, 2015, SH1 entered into a convertible term loan. Principal and interest payments of $0.02 million are due monthly. The loan bears interest at an annual rate of 6.68%, with the remaining principal balance due upon maturity at August 20, 2030. The loan is secured by a deed of trust to Public Trustee, assignment of leases and rents, security agreements, and SH1’s fixture filing. On June 30, 2025, the Company entered into an agreement to sell the Company’s managing member interest in SH1. As a result, the Company reported the associated liabilities related to the convertible term loan as Liabilities held for sale in the Company’s consolidated balance sheets as of June 30, 2025.
Aggregate maturities of our debt as of June 30, 2025 were as follows:
| Long-term debt | |||||
| in thousands | |||||
| Year ending June 30: | |||||
| 2026 | $ | 2,250 | |||
| 2027 | 3,000 | ||||
| 2028 | 3,000 | ||||
| 2029 | 51,750 | ||||
| 2030 | — | ||||
| Thereafter | — | ||||
| Total debt | $ | 60,000 | |||
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.