Sonida completes initial phase of debt restructuring of 49 assets

On June 29 Sonida (SNDA) entered into a comprehensive forbearance agreement with Fannie Mae (FNMA) as the first of a two-step process to modify all existing mortgage agreements with Fannie Mae by the end of Q3 2023. In the second step, Sonida and Fannie Mae have agreed to exercise commercially reasonable efforts to enter into a loan modification agreement for each of their existing mortgage agreements on or before September 30,. The terms of the proposed loan modification are set out in an agreed upon term sheet contained in the forbearance agreement and are subject to certain conditions customary for a transaction of this nature, as set forth in the forbearance agreement. The forbearance and subsequent loan modification provide the Company with additional financial flexibility to build on its strong operational momentum and pursue its strategic growth plan. Ironhound Management acted as an advisor to the Company in its discussions with Fannie Mae. Additionally, the Company secured a $13.5M equity commitment, available in part or in whole at the Company’s sole discretion for 18 months, from Conversant Capital, the Company’s largest shareholder, and modified the covenants on its loan with Ally Bank (ALLY). Under the Fannie forbearance agreement and beginning with the June 2023 payments, Sonida will make reduced debt service payments in contemplation of the loan modification terms and will continue to do so through the forbearance period. In addition, and in consideration for the forbearance, Sonida made a $5M payment to be applied against the existing loan balances in conjunction with the execution of the forbearance agreement.