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Halcyon Home Health At risk No new money

Home health agency · Senior loan · $13.5M deployed · Last report Oct 12

Covenants

1 of 4 breachedTightest: DSCR, breached by 10.0%As of Sep 30 · monthly, certified quarterly

Debt service coverage

Breached
Required
Actual
≥ 1.20x
1.08x
Over the limit10%
  • Breached at Q3 by 0.12x.
  • Earnings must rise about $0.35M to cure it.

Net leverage

Passing
Required
Actual
≤ 7.00x
6.20x
Room left11.4%
  • Earnings can fall $0.35M before a breach.
  • Breach likely at Q4 if the DSCR stays low.

Equipment spending

Passing
Required
Actual
≤ $0.8M / yr
$0.6M
Room left25%
  • $0.2M left this year.
  • No large purchases planned.

Interest coverage

Passing
Required
Actual
≥ 1.50x
1.74x
Room left16%
  • Earnings can fall $0.4M before a breach.
  • Tightens as cash interest steps up in January.

Compliance certificates

  • Q3 compliance certificate
    Due Nov 14 (45 days after quarter end)
    In draft, breach shown
  • Q2 compliance certificate
    Filed Aug 14
    Accepted
  • Q1 compliance certificate
    Filed May 13
    Accepted

What could change this

  • A signed forbearance gives the company until Jan 31 to bring the DSCR back above 1.20x.
  • Collecting the $0.8M of 90-day-late payer claims adds about three weeks of runway.
  • If cash falls below $0.5M, payroll for the week of Dec 4 is at risk.

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