US Medicare insurer SelectQuote has secured $415 million in financing, comprised of a $325 million term loan from Pathlight Capital and a $90 million credit facility from UMB Bank.
The refinancing extends the maturity of the company’s term debt to January 2031 and increases liquidity to support ongoing operations.
Proceeds from the new term loan were used to fully repay all existing term debt, including amounts originally scheduled to mature in June 2026 and September 2027.
Under the updated structure, the revolving credit facility was increased to $90 million during peak periods, up from $72 million under the previous agreement.
The term loan also has lower principal amortization and provides greater investment flexibility compared to SelectQuote’s prior term debt, the group said.
Tim Danker, CEO of SelectQuote, said, “We are extremely pleased to announce this new financing agreement, which marks an important step in the continued optimization of our capital structure. As we emerge from another successful annual Medicare enrollment period, this new financing agreement positions us well to continue to invest in and grow our industry-leading health insurance and senior health services businesses.”
According to the company, the new facility offers a slightly lower cost of capital and includes provisions for possible future interest rate reductions of up to 100 basis points, as well as increased operational flexibility.
It said the refinancing reflects lenders’ confidence in its business model, citing approximately $1 billion in fees receivable and growing cash generation from its SelectRx pharmacy and health services division.
Ryan Clement, SelectQuote’s Chief Financial Officer, added: “This successful financing is a clear validation of our business model and the confidence our lending partners have in SelectQuote’s cash flow generation capabilities. Combined with the enhanced UMB revolver, we have significantly strengthened our liquidity position and overall financial flexibility to execute our strategic priorities.”
Last February, SelectQuote received a $350 million investment from funds managed by Bain Capital, Morgan Stanley Private Credit and Newlight Partners.
“SelectQuote Closes $415 Million Credit Facility and Extends Debt Maturity” was originally created and published by International Life Insurancea brand owned by GlobalData.
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