Enhabit Shares Plummet After Exceeding Q3 Net Leverage Ratio, Secures Waiver with Wells Fargo

Shares of home healthcare provider Enhabit experienced a significant drop of 29% on Tuesday after the company reported a breach of its total net leverage ratio for the third quarter. This decline adds to a tumultuous year for the firm, with its stock falling by more than a third since the beginning of the year.

The breach prompted Enhabit to announce a limited waiver agreement with Wells Fargo, which serves as the administrative agent for its other lenders. Under this agreement, the principal amount of Enhabit’s revolving loans has been reduced from $350 million to $230 million. This announcement was made after the market closed on Monday.

Alongside the reduction in loan principal, the agreement also allows Enhabit to waive financial covenants for the upcoming tests of its leverage, which were scheduled for September 30.

These recent events signify a challenging time for Enhabit as it navigates financial pressures while attempting to maintain its standing in the home healthcare sector. With the new agreement in effect, the impact on Enhabit’s financial performance in the upcoming quarters will be closely watched.

This article was generated with the support of AI and reviewed by an editor.