UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
On December 28, 2023, Oscar Health, Inc. (the “Company”) entered into the Third Amendment to Credit Agreement (the “Third Amendment”) with Wells Fargo Bank, National Association, as administrative agent (in such capacity, the “Administrative Agent”), Oscar Management Corporation, as a subsidiary guarantor and the lenders party thereto, which amends the Credit Agreement, dated as of February 21, 2021 (as amended by the First Amendment to Credit Agreement, dated as of January 27, 2022, and as further amended by the Second Amendment to Credit Agreement, dated as of July 21, 2023, the “Credit Agreement” and as amended by the Third Amendment, the “Amended Credit Agreement”).
The Third Amendment amended the Credit Agreement to, among other things: (i) extend the maturity date of the revolving loan facility (as amended by the Third Amendment, the “Revolving Loan Facility”) to December 28, 2025 and (ii) decrease the total commitments under the Revolving Loan Facility to $115,000,000. The Amended Credit Agreement retains the ability for the Company to increase commitments under the Revolving Loan Facility by an aggregate amount not to exceed $50,000,000, subject to customary closing conditions.
Pricing under the Amended Credit Agreement is substantially similar to the Credit Agreement. Outstanding loans under the Revolving Loan Facility will continue to bear interest at a floating rate per annum of, at the Company’s option, adjusted term SOFR or an alternative base rate, plus the continued applicable margin of 4.50% for loans based on term SOFR and 3.50% for loans based on the alternative base rate.
In addition, the Revolving Loan Facility requires compliance with certain financial covenants as detailed below:
| • | The Company may not permit direct policy premiums for any fiscal quarter to be less than certain thresholds. |
| • | The Company may not permit the medical loss ratio (as defined in the Amended Credit Agreement) (calculated on a year-to-date basis) as of the last date of any fiscal quarter to be more than certain thresholds. |
| • | The Company may not permit consolidated adjusted EBITDA (calculated on a year-to-date basis) as of the last day of each fiscal quarter to be less than certain thresholds. |
| • | The Company may not permit liquidity (as defined in the Amended Credit Agreement) as of the last day of any fiscal quarter, or, if the Revolving Loan Facility is drawn by more than 60%, as of the last day of any fiscal month, to be less than an amount equal to the total revolving commitments less $50,000,000. |
The foregoing description of the Third Amendment does not purport to be complete and is subject to, and qualified in its entirety by the full text of the Third Amendment, which is filed as Exhibit 10.1 hereto and incorporated by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant.
The information related to the Company’s entrance into the Third Amendment contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. |
Description | |
| 10.1 | Third Amendment to Credit Agreement, dated as of December 28, 2023, by and among Oscar Health, Inc., as borrower, the several lenders from time to time parties thereto, and Wells Fargo Bank, National Association, as administrative agent, among others. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Oscar Health, Inc. | ||||||
| Date: December 29, 2023 | By: | /s/ Ranmali Bopitiya | ||||
| Ranmali Bopitiya | ||||||
| Chief Legal Officer | ||||||