What’s pushing APM Human Services shares 9% higher today?

The APM Human Services International Pty (ASX: APM) share price is racing higher in mid-afternoon trade.

This comes after the international human services provider delivered a debt refinance update to the market.

At the time of writing, APM shares are swapping hands at $3.19, up 9.25%.

What did APM announce?

APM shares are pushing higher as investors rally behind the company’s refinancing efforts.

According to its release, APM advised that it has successfully secured committed funding to refinance its debts. This involves an $810 million syndicated multi-currency revolving corporate facility to extinguish its existing Term Loan B facility.

APM noted that it has a current net debt of around $450 million with roughly $360 million of liquidity available.

On average, the new facility funding costs are 210 basis points above BBSY at current levels of net debt. BBSY represents the ‘bank bill swap bid rate’, which is the interest rate used for debt financing.

Pleasingly, this represents a saving of 240 basis points compared to APM’s existing Term Loan B facility.

The new facility is revolving, which means that APM can further reduce its interest costs through cash offsets.

The company estimates it will eliminate interest costs of $15 million annually by swapping over to the new loan.

APM says there is no financial penalty for breaking the Term Loan B facility.

The $810 million facility is available in two tranches, a three-year $505 million tranche and a five-year $305 million tranche.

The company expects the refinancing to occur in mid-July.

APM group CEO Michael Anghie touched on the successful refinancing, saying:

Our new facilities have been strongly supported by high quality Australian and International lenders and provide APM with flexibility and reduced interest costs.

We are particularly proud to have the first Social Loan linked corporate facility in Australia. The Social Loan demonstrates the social impact of the services APM provides and the positive impact on society and goes to our purpose of Enabling Better Lives.

APM share price snapshot

Over the last 12 months, APM shares have moved in circles to register a loss of 10% for the period.

Although, when looking at year to date, its shares are 12% higher.

APM has a market capitalisation of approximately $2.9 billion, based on the current share price.

The post What’s pushing APM Human Services shares 9% higher today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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