(Bloomberg) -- Sound Inpatient Physicians Inc. is in advanced discussions with a group of creditors for a deal that would extend the maturities of the hospital staffing firm’s first- and second-lien term loans to help stave off a cash crunch, according to people with knowledge of the situation. 

The deal would also include new funding from the company’s private equity sponsor, Summit Partners, and first-lien lenders, said the people, who asked not to identified because the matter is private. The plans are not yet final and could still change, the people added. 

Several physician staffing firms have seen earnings pressures in the aftermath of the No Surprises Act, which aims to protect customers from large, unexpected bills when they receive out-of-network care and emergency services. Sound and its lenders earlier hired advisers following a sharp drop in the company’s loan prices last year. 

The creditor group engaged Evercore Inc. and Paul Weiss Rifkind Wharton & Garrison for advice, while the company hired PJT Partners, Bloomberg previously reported. 

Representatives for Sound, Summit, Evercore, and Paul Weiss did not respond to requests for comment. A representative for PJT Partners declined to comment. 

Tacoma, Washington-based Sound’s capital structure includes $121 million in first-lien revolving credit facilities and a $764 million outstanding first-lien senior secured credit facility, both due in June 2025, and a $215 million second-lien term loan due in June 2026, according to S&P Global Ratings, which downgraded the company to CCC in August. 

The first-lien loan trades at around 57 cents on the dollar, while the second-lien term loan changes hands near 8 cents on the dollar, according to data compiled by Bloomberg.

A group of investors led by Summit acquired Sound from Fresenius Medical Care AG for $2.15 billion in 2018.

©2024 Bloomberg L.P.