Acadia Healthcare's stock plummeted 5.09% in intraday trading on Wednesday, following the company's announcement of a private offering of $500 million in senior notes due 2033.
The healthcare services provider stated that the proceeds from the debt offering will be used to prepay a portion of the outstanding borrowings under its existing senior secured revolving line of credit. This move raised concerns among investors about the company's debt levels and potentially higher interest expenses, leading to the sell-off in the stock.
Analysts at TD Cowen and Leerink Partners also lowered their price targets on Acadia Healthcare, citing the potential impact of the debt offering on the company's financial position and future profitability. The market reaction to the news highlights the sensitivity of investors to debt-related concerns in the current economic environment.