Shares of Root, Inc. (ROOT) soared over 34% in after-hours trading on Tuesday, following the insurance technology company's announcement of a successful refinancing of its term loan facility with funds managed by BlackRock. The new deal secured significantly more favorable terms, enhancing Root's financial flexibility and lowering its cost of capital.

Earlier on Tuesday, Root also reported its third-quarter 2024 financial results. The company's report and management commentary can be found on its investor relations website at ir.joinroot.com.

The amended loan facility with BlackRock consists of a six-year $200 million term loan, reducing the principal amount by $100 million from the previous facility. Notably, the new loan carries an interest rate of 3-month term SOFR plus 600 basis points with performance-based step-downs, reflecting a reduction of at least 300 basis points compared to the prior term loan.

Root's Chief Financial Officer, Megan Binkley, expressed excitement over the refinancing, stating, "We've enhanced our capital structure while maintaining ample growth capital." At current interest rates, the amended loan is expected to reduce Root's interest expense by approximately 50% on a run-rate basis, further accelerating profitability and enabling increased investments in the company's strategic growth initiatives.

The successful refinancing showcases BlackRock's confidence in Root's strong performance and long-term growth outlook. With a significantly reduced interest burden and improved capital structure, Root is poised to enhance its financial position and accelerate its ongoing expansion and strategic initiatives.