By Devika Patel
Knoxville, Tenn., July 17 – Strongbridge Biopharma plc arranged a $50 million senior credit facility with CRG LP, according to a press release.
The credit facility consists of $40 million borrowed initially with access to an additional $10 million by June 30, 2018 once the company achieves certain milestones.
The loan is due in six years with three years of interest-only payments. The interest-only period may be extended to six years based on the achievement of certain milestones during the first three years of the loan term.
Interest accrues at 12.5% per annum, of which 4% may be deferred during the first three years (which may be extended for the entire term if some conditions are satisfied) by adding that amount to the principal loan amount.
The company is also required to pay the lenders a final payment fee when the loan is repaid in full.
The loan may be repaid subject to a prepayment fee during the first five years, which reduces each year, and no prepayment fee in the sixth year.
In some circumstances, including a change of control and certain asset sales or licensing transactions, the company must prepay all or a portion of the loan.
The company has issued seven-year warrants to the investor for 394,289 ordinary shares, each exercisable at $7.37.
Concurrent with the first tranche, CRG also purchased $3 million of the company’s ordinary shares at $6.98 per share.
The Trevose, Pa., biopharmaceutical company will use the proceeds to retire its existing debt facility and for general corporate purposes and working capital.
| Issuer: | Strongbridge Biopharma plc
|
| Issue: | Senior credit facility
|
| Amount: | $50 million
|
| Maturity: | June 30, 2023
|
| Coupon: | 12.5%, of which 4% may be paid in kind
|
| Call option: | Yes, subject to prepayment fee that declines to zero in year six
|
| Warrants: | For 394,289 shares
|
| Warrant expiration: | Seven years
|
| Warrant strike price: | $7.37
|
| Investor: | CRG LP
|
| Settlement dates: | July 17 (for $40 million), by June 30, 2018 (for $10 million)
|
| Distribution: | Private placement
|
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