Varex Secures $490M Debt Refinancing, Cuts Interest Costs
Event summary
- Varex closed a $490M credit facility on March 13, 2026, including $350M term loan, $100M revolving credit, and $40M delayed draw term loan.
- The company redeemed $368M of 7.875% Senior Secured Notes due 2027, terminating its $155M revolving credit facility.
- Refinancing reduces annual interest expense by over $7M through lower rates and $18M debt reduction.
- Borrowings under the new facility bear interest at SOFR + 2.50% margin, with an interest rate swap fixing SOFR at 3.65%.
The big picture
Varex’s debt refinancing strengthens its balance sheet and reduces financial strain, aligning with broader trends in the medical and industrial imaging sectors where cost efficiency and capital discipline are critical. The move reflects strategic efforts to optimize capital structure amid evolving market dynamics, particularly as the company seeks to prioritize long-term shareholder value through improved financial flexibility.
What we're watching
- Debt Management
- How Varex will deploy the $100M revolving credit facility and manage the $40M delayed draw term loan.
- Financial Flexibility
- Whether the reduced debt and lower interest rates will improve free cash flow generation as anticipated.
- Interest Rate Risk
- The pace at which changes in the company’s consolidated net leverage ratio could impact future borrowing costs.