Intercept Pharmaceuticals to buy $327.9 million of 3.5% convertibles

By Mary-Katherine Stinson

Lexington, Ky., Aug. 19 – Intercept Pharmaceuticals, Inc. announced an agreement reached in private negotiations with certain noteholders to repurchase $327.9 million of its senior secured 3.5% convertible notes due 2026 for $222 million cash and 9.4 million shares, according to a company news release.

The repurchase is expected to close promptly subject to customary closing conditions.

This latest transaction reduces the principal note balance to $172.1 million from $500 million, and the annual interest expense will be reduced to $6 million from $11.5 million.

The company stated in the press release that it expects that the shares delivered to investors will be used to cover investors’ existing hedge positions in respect of the 2026 notes.

With this purchase and other previously announced transactions undertaken over the last 12 months to improve the company’s capital structure, Intercept has reduced its total outstanding debt by 45% and reduced the potential share dilution by 6.3 million shares.

Intercept Pharmaceuticals is a New York-based biopharmaceutical company that focuses on therapeutics to treat progressive non-viral liver diseases.

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