BlackRock agrees to $300M loan for Root Insurance
Root Insurance announced the successful completion of a new term loan facility with BlackRock Financial Management Inc., on behalf of funds and accounts under its management, and its affiliates and co-investor. The five-year, $300 million term loan will carry an interest rate of term SOFR + 9%. In conjunction with the term loan, Root issued BlackRock warrants equal to 2% of all issued and outstanding shares on a diluted basis at an exercise price of $9.00 per share which carry an expiration date of the earlier of the maturity of the term loan or the full cash repayment of the term loan.
Last week, the company laid off 330 employees.
“We are pleased with the successful execution of this new term facility. It accomplished several important objectives including extending our debt maturity and further enhancing our liquidity position with a partner focused on the long-term success of Root. We are executing on a disciplined strategy to create enduring value through strong underwriting results, the development of our embedded product, and prudent capital management.” – Root co-founder and CEO Alex Timm
“We are excited to form a long-term partnership with Root, an auto Insurtech company with differentiated technology, and we recognize the potential of the innovative embedded product the company is developing through their exclusive partnership with Carvana.” – Mark Lawrence, managing director on BlackRock’s global credit team.