Array to swap $107 million of 2020 convertibles for stock, new notes

By Marisa Wong

Morgantown, W.Va., Nov. 16 – Array BioPharma Inc. said it entered into separate privately negotiated exchange agreements with some holders of its 3% convertible senior notes due 2020.

Under the exchange agreements, Array will exchange about $107 million of the existing 2020 notes for newly issued common stock and about $107 million of newly issued 2.625% convertible senior notes due Dec. 1, 2024.

The number of shares of common stock will be determined based on the volume-weighted average trading price of the company’s common stock on Nov. 17.

In connection with the exchange, holders of the 2020 notes may decide to adjust their hedge positions by purchasing shares of the company’s common stock or entering into other hedging transactions. These activities could affect the market price of the company’s common stock on the reference date for determining the number of exchange shares to be issued, the company noted.

Settlement is expected to occur on Dec. 1.

After the exchanges, the aggregate principal amount of 2020 notes will be reduced to roughly $25.2 million.

The company said it will not receive any cash proceeds from the issuance of the exchange shares or the 2024 notes.

The initial conversion rate of the new 2024 notes will be based on a conversion premium of about 32.5% over the average of the daily volume-weighted average price of the company’s common stock on Nov. 17.

The new notes will be non-callable prior to Dec. 8, 2021, except in the case of a fundamental change.

Array is a Boulder, Colo.-based biopharmaceutical company focused on small-molecule drugs to treat patients afflicted with cancer and inflammatory diseases.

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