Note 16 - Long-term Debt |
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| Long-Term Debt [Text Block] |
Note 16 – Long-Term Debt
Long–term debt consists of the following (dollars in thousands):
On May 26, 2026, the Company entered into a credit agreement, consisting of a $475,000,000 senior unsecured term loan facility and a $75,000,000 senior unsecured revolving credit facility (“credit agreement”). The credit agreement became effective on July 1, 2026, in conjunction with the transaction with NHI. The term loan facility and credit facility will mature on the anniversary of the date of initial funding to the Company under the credit agreement, or July 1, 2031. The term loan facility will amortize in quarterly installments of approximately $5,938,000, with the remaining balance due at maturity. Borrowings under the credit facility require interest only payments.
Borrowings under the credit agreement will bear interest, at NHC’s option, at a rate based on either Term SOFR or a base rate, in each case plus an applicable margin. The applicable margin will vary based on the Company’s consolidated leverage ratio and, based on the applicable pricing grid, will range from 1.25% to 1.75% per annum for Term SOFR borrowings and 0.25% to 0.75% per annum for base rate borrowings. The base rate is a variable daily interest rate set at the highest among: (1) the Federal Funds Rate plus 0.50%, (2) Bank of America’s publicly announced prime rate, or (3) Term SOFR plus 1.00%. In all cases, the base rate has a floor of 1.00%. The applicable rate as of the Funding Date and until the first business day following delivery of the compliance certificate for the fiscal quarter ending December 31, 2026 will be Term SOFR + 1.50% or base rate + 0.50%. NHC is also required to pay a commitment fee on the daily unused portion of the revolving credit facility, which ranges from 0.20% to 0.30% per annum based on the consolidated leverage ratio, payable quarterly in arrears.
The credit agreement contains customary representations and warranties, financial covenants, and other customary affirmative and negative covenants. The credit agreement also contains customary events of default. Based on level 2 inputs, the carrying value of the Company's long-term debt is considered to approximate the fair value of such debt based upon the interest rates that the Company believes it can currently obtain for similar debt.
The aggregate maturities of long–term debt for the five years subsequent to September 30, 2026 are as follows (in thousands):
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