LifeStance Health Group, Inc. Debt Disclosure
NOTE 10 LONG-TERM DEBT
On May 4, 2022, the Company entered into a credit agreement (as amended, the “2022 Credit Agreement”) among LifeStance Health Holdings, Inc., Lynnwood Intermediate Holdings, Inc., Capital One, National Association, and each lender party thereto. The term loans and delayed draw term loans were payable in quarterly principal and interest payments through May 16, 2028.
On December 19, 2024, the Company entered into a credit agreement (the “2024 Credit Agreement”) among LifeStance Health Holdings, Inc., Lynnwood Intermediate Holdings, Inc., Capital One, National Association, and each lender party thereto. The 2024 Credit Agreement established commitments in respect of a senior secured term loan facility of $290,000 and a senior secured revolving loan facility of up to $100,000. The Company borrowed $290,000 in term loans, payable in quarterly principal and interest payments, with a maturity date of December 19, 2029. The loans under the term loan facility bear interest at a rate per annum equal to (x) term SOFR (which term SOFR is subject to a minimum of 0.00%) plus an applicable margin of 3.00% subject to stepdowns based on leverage-based metrics or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.50% above the federal funds effective rate and (iii) one-month term SOFR (which term SOFR is subject to a minimum of 0.00%) plus 1.00%) plus an applicable margin of 2.00% subject to stepdowns based on leverage-based metrics. The term loans are collateralized by substantially all of the assets of the Company. The revolving loan has interest only payments until the maturity date of December 19, 2029.
The proceeds from the 2024 Credit Agreement term loans were used to repay in full and extinguish the 2022 Credit Agreement. In relation to the 2022 Credit Agreement, the Company recognized an extinguishment of debt charge within interest expense of $5,032 consisting of the write-off of unamortized debt issue costs associated with the extinguished term loans.
The 2024 Credit Agreement requires the Company to maintain compliance with certain restrictive financial covenants related to earnings, leverage ratios, and other financial metrics. The Company was in compliance with all debt covenants at December 31, 2024 and 2023.
Long-term debt consists of the following:
|
|
December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Term loans |
|
$ |
290,000 |
|
|
$ |
197,500 |
|
Delayed Draw term loans |
|
|
— |
|
|
|
91,994 |
|
Total long-term debt |
|
|
290,000 |
|
|
|
289,494 |
|
Less: Current portion of long-term debt |
|
|
(7,250 |
) |
|
|
(2,925 |
) |
Less: Unamortized discount and debt issue costs (1) |
|
|
(2,960 |
) |
|
|
(6,284 |
) |
Total Long-Term Debt, Net of Current Portion |
|
$ |
279,790 |
|
|
$ |
280,285 |
|
The current portion of long-term debt is included within other current liabilities on the consolidated balance sheets.
Interest expense, net consists of the following:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2024 |
|
|
2023 |
|
|
2022 |
|
|||
Interest expense, net |
|
$ |
26,535 |
|
|
$ |
21,220 |
|
|
$ |
19,928 |
|
Future principal payments on long-term debt as of December 31, 2024 are as follows:
Year Ended December 31, |
|
Amount |
|
|
2025 |
|
$ |
7,250 |
|
2026 |
|
|
14,500 |
|
2027 |
|
|
14,500 |
|
2028 |
|
|
21,750 |
|
2029 |
|
|
232,000 |
|
Total |
|
$ |
290,000 |
|
The fair value of long-term debt is based on the present value of future payments discounted by the market interest rates or the fixed rates based on current rates offered to the Company for debt with similar terms and maturities, which is a Level 2 fair value measurement. Long-term debt is presented at carrying value on the consolidated balance sheets. The fair value of long-term debt at December 31, 2024 and 2023 was $287,109 and $304,955, respectively.
Revolving Loan
Under the 2022 Credit Agreement, the Company had a revolving loan commitment from Capital One in the amount of $50,000.
Under the 2024 Credit Agreement, the Company has a revolving loan commitment in the amount of $100,000. Any borrowing on the revolving loan under the 2024 Credit Agreement is due in full on December 19, 2029. The revolving loan bears interest at a rate per annum equal to (x) term SOFR (which term SOFR is subject to a minimum of 0.00%) plus an applicable margin of 3.00% subject to stepdowns based on leverage-based metrics or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.50% above the federal funds effective rate and (iii) one-month term SOFR (which term SOFR is subject to a minimum of 0.00%) plus 1.00%) plus an applicable margin of 2.00% subject to stepdowns based on leverage-based metrics. The unused revolving loan incurs a quarterly undrawn commitment fee of 0.45% per annum subject to stepdowns based on leverage-based metrics.
There are no amounts outstanding on the revolving loan as of December 31, 2024 and 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Feb 27, 2025 | Showing above |
| 2023 | Feb 28, 2024 | |
| 2021 | Mar 17, 2022 | |
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.