Intercept Pharmaceuticals Exchanges Convertible Notes In Order To Further Reduce Debt


To strengthen its capital structure, Intercept has been making a number of financial decisions.

Intercept Pharmaceuticals (NASDAQ:ICPT)

Following a similar deleveraging strategy unveiled in August, Intercept Pharmaceuticals (NASDAQ:ICPT), a biotech company with a focus on liver illnesses, signed exchange agreements on Friday to repurchase about $44.5 million worth of convertible debt for cash and common stock.

The 3.50% Convertible Senior Secured Notes due 2026 may be exchanged by the firm thanks to the privately negotiated Exchange Agreements signed on Thursday.

According to the arrangements, notes with a principal value of $44.5 million would be exchanged for $22.7 million in cash and 1.7 million shares of freshly issued common stock. Depending on the usual closing requirements, the deal is anticipated to close on September 6.

The most recent deal comes after comparable agreements to repurchase $327.9 million of its secured convertible debt for cash and stock were disclosed by ICPT in August. The principal amount of the ICPT’s 2026 Notes has been reduced by both transactions from $500 million to $127.6 million.

Positively, Intercept has a strong balance sheet, as stated in the sentence. Despite the stock’s Sell rating, Seeking Alpha contributor Edward Zhang noted last month.

Financial transactions: Repurchasing convertible bonds

Intercept Pharmaceuticals Inc. announced on Friday that it had decided to retire $44.5 million of its 3.5% convertible senior secured notes due 2026 by exchanging $52.6 million in cash and stock.

The Morristown, New Jersey-based biopharmaceutical business announced that it would exchange the notes for $22.7 million in cash and approximately 1.65 million shares, which are worth almost $29.9 million at Thursday’s closing price of $18.06.

According to Intercept, the swap, along with the agreement made last month to trade $327.9 million of the notes for $406.4 million in cash and shares, would lower the principal debt of the 2026 notes from $500 million to $127.6 million.

Primary biliary cholangitis (PBC) and nonalcoholic steatohepatitis are two degenerative non-viral liver disorders that are the focus of the biopharmaceutical company Intercept’s development and commercialization efforts (NASH).

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