Valley Republic secures $20 million; Mustang Bio gets debt financing

By Devika Patel

Knoxville, Tenn., April 1 – There was moderate activity in the private placement markets on Monday, with two deals announced and one revised.

Valley Republic Bancorp, a Bakersfield, Calif.-based bank parent, reported that it has completed a $20 million private placement of 6% fixed-to-floaters due March 29, 2029.

New York’s Mustang Bio, Inc., a clinical-stage biopharmaceutical company, said it settled a $20 million debt financing with Horizon Technology Finance Corp. and Irvine, Calif.-based Endologix, Inc., a developer and manufacturer of minimally invasive treatments for aortic disorders, amended its facility agreement with Deerfield Private Design Fund IV, LP, extending the maturity date and tweaking the covenants.

Valley Republic places $20 million

Valley Republic Bancorp said it has settled a $20 million private placement of 10-year 6% fixed-to-floating rate subordinated notes. Performance Trust Capital Partners, LLC was the agent.

Interest accrues at 6% per year until March 29, 2024. From March 29, 2024 onwards, the notes will bear interest at a floating rate equal to Libor plus 352 basis points.

The notes are redeemable in whole or in part at par on or after March 29, 2024.

Proceeds will be used to support growth and for general corporate purposes.

Mustang Bio raises $15 million

Mustang Bio completed a $20 million debt financing with Horizon Technology Finance Corp.

The loan consists of $15 million borrowed initially with an additional $5 million that will become available to the company once it achieves certain milestones.

The company has issued warrants to Horizon for 288,184 common shares, each exercisable at $3.47.

Endologix extends loan to 2023

Endologix amended its facility agreement on Sunday with Deerfield Private Design Fund IV, LP, extending the maturity date of the credit agreement to the earlier of April 2, 2023 or the date the loans have been repaid in full.

The amendment also reduces the global excess liquidity covenant to $17.5 million from $22.5 million and reduces the minimum net revenue financial covenants.

In addition, the percentage of the $120 million of first out waterfall loans due on April 2, 2021 decreased to 16.67% from 33.33% of the first out waterfall loans outstanding on that date, while the percentage of the remainder of the first out waterfall loans due on April 2, 2022 remained at 50% of the first out waterfall loans outstanding on that date.

The amendment also provides for an increase of $5 million in the amounts payable to the holders of the first out waterfall notes as a fee upon termination under the facility agreement and to reimburse Deerfield for all expenses incurred by Deerfield in connection with the negotiation and documentation of the facility amendment.

Also, the existing right of the company to satisfy interest payments on the first out waterfall loans with up to 250,000 shares of its common stock has been removed.

In connection with entry into the amendment, the company is amending warrants to purchase 647,001 shares of common stock previously issued to Deerfield pursuant to the company’s prior facility agreement with Deerfield dated April 3, 2017 and warrants to purchase 875,001 shares of common stock previously issued last August to Deerfield under the facility agreement in order to reduce the exercise price of the warrants to the equity offering price.

All other material terms and conditions of the warrants will remain the same.

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