HealthStream Inc. Amends $50M Revolving Credit Facility

What Happened

• HealthStream Inc. (HSTM) entered into a Second Amendment to its Amended and Restated Revolving Credit Agreement dated September 10, 2026, with Truist Bank as Administrative Agent, Issuing Bank and Swingline Lender. The amendment continues a revolving credit facility with a maximum aggregate commitment of $50 million (originally under the prior agreement dated October 6, 2023). The facility matures on September 10, 2031 and remains unsecured. The Company retains an option to seek up to an additional $25 million of commitments subject to lender participation.

Key Details

• Revolving credit capacity: $50.0 million; swingline sublimit: $5.0 million; letter of credit sublimit: $5.0 million.
• Maturity date: September 10, 2031. Option to increase availability by up to $25.0 million with lender commitments.
• Interest: borrowings at either a base rate (prime/Fed funds/1-month Term SOFR floors) + margin or term SOFR + margin; initial margins are 0.50% (base rate loans) and 1.50% (SOFR loans). Swingline loans bear base rate + margin.
• Fees and covenants: commitment fee on unused capacity initially 20 bps; letter-of-credit fee tied to SOFR margin; financial covenants include a maximum net funded debt leverage ratio of 3.00x and a minimum interest coverage ratio of 3.00x.
• Guarantees/collateral: Company obligations are unsecured; newly formed or acquired domestic subsidiaries will be required to guarantee the loans.

Why It Matters

• This amendment preserves HealthStream’s committed liquidity ($50M) through 2031 and keeps flexibility to expand debt availability by up to $25M if lenders agree—important for working capital, M&A or capital needs.
• Borrowing costs are variable and tied to market rates (SOFR or base rate) plus a margin, so interest expense will move with market rates; initial margins and a 20 bps commitment fee set the near-term cost of the facility.
• The financial covenants (3.00x leverage and 3.00x interest coverage) set measurable limits on leverage and required earnings coverage—breaching them could restrict actions or trigger defaults.