By Marisa Wong
Morgantown, W.Va., June 11 – Vivus, Inc. issued $110 million of 10.375% senior secured notes due June 30, 2024 at 99, according to an 8-K filing with the Securities and Exchange Commission.
Vivus first announced the private placement with funds managed Athyrium Capital Management LP in May. The notes were issued on Friday.
Vivus may issue up to an additional $10 million of the notes within 12 months of the settlement date.
The notes will be interest-only for the first three years. Beginning June 30, 2021, the company will make mandatory prepayments of principal in equal installments plus a 1% prepayment fee on each interest payment date prior to maturity.
Prior to June 8, 2020, the notes are callable at any time at a price equal to (1) par plus (2) the amount by which (a) the sum of (i) 105% of par plus (ii) the present value at the redemption date of all required interest payments due through June 8, 2020, discounted at Treasuries plus 50 basis points, exceeds (b) the amount to be redeemed plus (3) a fee equal to 1% of the principal amount paid on the redemption date and accrued interest to the redemption date.
Beginning on June 8, 2020, the notes will be redeemed at the applicable redemption price plus a fee equal to 1% of the principal amount paid on the redemption date, along with accrued interest to the redemption date. The applicable redemption price is 104 from June 8, 2020 to June 7, 2021, 101 from June 8, 2021 to June 7, 2022 and par after that.
In addition to the notes, Vivus also issued to the investors warrants for up to 3.3 million shares of its common stock. The six-year warrants are exercisable at $0.3951 per share.
Concurrently with the notes sale, Vivus will repurchase the $60 million of convertible notes held by funds managed by Athyrium for a purchase price of $51 million.
The company also plans to restructure a portion of its corporate debt, as previously noted.
Mountain View, Calif.-based Vivus is a pharmaceutical company focused on treatments for obesity and sexual dysfunction.
| Issuer: | Vivus, Inc.
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| Issue: | Senior secured notes
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| Amount: | $110 million
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| Maturity: | June 30, 2024
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| Coupon: | 10.375%
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| Price: | Par
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| Call option: | Prior to June 8, 2020, at any time at (1) par plus (2) the amount by which (a) the sum of (i) 105% of par plus (ii) the present value at the redemption date of all required interest payments due through June 8, 2020, discounted at Treasuries plus 50 basis points, exceeds (b) the amount to be redeemed plus (3) a fee equal to 1% of the principal amount paid on the redemption date and accrued interest; at 104 from June 8, 2020 to June 7, 2021, 101 from June 8, 2021 to June 7, 2022 and par after that, plus in each case a fee equal to 1% of the principal amount paid on the redemption date, along with accrued interest
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| Warrants: | For up to 3.3 million shares of common stock
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| Warrant expiration: | Six years
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| Warrant strike price: | $0.3951 per share
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| Investors: | Affiliates of Athyrium Capital Management LP
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| Announced: | May 1
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| Settlement date: | June 8
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| Distribution: | Private placement
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