Chicago, Aug. 11 – Intercept Pharmaceuticals Inc. is issuing $500 million of new 3.5% convertible notes due Feb. 15, 2026, partially based on an exchange that was privately negotiated with some holders of existing convertible notes and partially from the sale of new notes.
The company negotiated with some holders representing $306.5 million of the outstanding 3.25% convertibles due 2023 and $114.7 million of the 2% convertibles due 2026, according to a press release.
The company is selling an additional $117.6 million of the new notes for cash. Cash proceeds, net of advisory fees and expenses, will be approximately $107.3 million.
Proceeds from the cash sale will be used for general corporate purposes and for the following transactions:
• $75.7 million will be used to repurchase shares of common stock in privately negotiated transactions at $16.75 per share (equal to the closing price on Aug. 10); and
• Intercept may also buy back and retire additional 2023 notes.
After the exchanges, there will be $153.5 million, or 33.4%, of the 2023 notes remaining and $115.3 million, or 50.2%, of the 2026 notes.
The new notes will be guaranteed by certain subsidiaries of Intercept and will be senior obligations.
The initial conversion premium is 25% over the company’s common stock sale price on Aug. 10.
The new notes will be convertible into cash, shares of common stock or a combination of cash shares at the issuer’s option.
Before Nov. 15, 2025 the notes will be convertible at the option of the holders subject to a 130% hurdle.
After Nov. 15, 2025, the notes can be converted by the holders at any time.
After Feb. 20, 2024, the notes are convertible at Intercept’s option, subject to a 130% hurdle.
Intercept Pharmaceuticals is a New York-based biopharmaceutical company.
| Issuer: | Intercept Pharmaceuticals Inc.
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| Securities: | Convertible senior notes
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| Amount: | $500 million
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| Maturity: | Feb. 15, 2026
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| Coupon: | 3.5%
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| Conversion premium: | 25%
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| Conversion price: | $20.94
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| Conversion rate: | 47.7612
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| Call options: | Non-callable until Feb. 20, 2024 and then subject to a 130% hurdle
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| Announcement date: | Aug. 10
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| Stock symbol: | Nasdaq: ICPT
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| Stock reference price: | $16.75 on Aug. 10
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| Market capitalization: | $507.98 million
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