ATI Physical Therapy Closes $26 Million 8% Second Lien PIK Convertible Note Financing

ATI Physical Therapy, a leading provider of outpatient physical therapy services, has successfully closed a $26 million financing round through the issuance of an 8% second lien PIK convertible note. This strategic move will enable ATI to continue its expansion and growth initiatives, further solidifying its position in the competitive healthcare market.

The $26 million financing round, led by a prominent investment firm, will provide ATI with the necessary capital to fund its ongoing growth plans. The proceeds from this financing will be used to support ATI's expansion into new markets, acquire complementary businesses, and invest in new technologies and services. This strategic move aligns with ATI's commitment to delivering exceptional care and outcomes to its patients while maintaining a strong financial position.

The issuance of an 8% second lien PIK convertible note allows ATI to access capital at a lower cost compared to traditional debt financing. The PIK (Payment-in-Kind) feature enables ATI to pay interest in the form of additional shares or convertible debt, rather than cash, which can result in lower interest costs for the company. Additionally, the convertible nature of the note provides ATI with the flexibility to convert the debt into equity if the company's stock price increases, potentially diluting existing shareholders but also providing a path to higher returns on investment for note holders.



While the issuance of a second lien PIK convertible note can provide ATI with increased liquidity and financial flexibility, it also carries certain risks. The potential for higher interest costs in the future, if the note is not converted into equity, could strain ATI's financial resources and cash flow. Additionally, the increased leverage resulting from the issuance of the note could make it more difficult for ATI to access additional capital or refinance its debt in the future. However, ATI's strong financial position and growth prospects should mitigate these risks.

In conclusion, ATI Physical Therapy's $26 million financing round through the issuance of an 8% second lien PIK convertible note is a strategic move that will enable the company to continue its expansion and growth initiatives. While the note carries certain risks, ATI's strong financial position and growth prospects should mitigate these risks and provide a solid foundation for the company's future success.