By Lisa Kerner
Charlotte, N.C., Oct. 6 – Nektar Therapeutics closed a private placement of $250 million of 7.75% senior secured notes due in 2020 with investment vehicles managed by affiliates of TPG Special Situations Partners.
A portion of the proceeds was used to redeem all of Nektar’s currently outstanding $125 million of 12% senior secured notes due 2017.
“This transaction significantly reduced our cost of borrowing and avoided the dilutive effect of an equity or convertible debt offering,” said Nektar president and chief executive officer Howard Robin in a news release. “We have strengthened our financial position and now expect to have greater than $305 million in cash and equivalents at the end of 2015.”
Interest is payable quarterly in arrears on Jan. 15, April 15, July 15 and Oct. 15, beginning on Oct. 15.
Nektar may redeem some or all of the notes at any time prior to Oct. 5, 2017 by paying a make-whole premium, plus accrued and unpaid interest to the date of redemption.
Beginning of Oct. 5, 2017, Nektar may redeem some or all of the notes at a redemption price equal to 104% of the principal amount of the notes to be redeemed if the redemption date is prior to Oct. 5, 2018, 102% of the principal amount of the notes to be redeemed if the redemption date is prior to Oct. 5, 2019, or 100% of the principal amount of the notes to be redeemed if the redemption date is on or after Oct. 5, 2019, plus, in each case, accrued and unpaid interest to the applicable redemption date.
Nektar is required to maintain a minimum cash balance of $60 million, according to a form 8-K filed with the Securities and Exchange Commission.
The offer and sale of the notes is exempt from the registration requirements of the Securities Act of 1933.
Nektar is a drug development company based in San Francisco.
| Issuer: | Nektar Therapeutics
|
| Issue: | Senior secured notes
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| Amount: | $250 million
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| Maturity: | Oct. 5, 2020
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| Coupon: | 7.75%
|
| Distribution: | Private placement
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| Purchaser: | Investment vehicles managed by affiliates of TPG Special Situations Partners
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