Impel Pharmaceuticals adds $20 million term loans, extends forbearance

By Wendy Van Sickle

Columbus, Ohio, Sept. 7 – Impel Pharmaceuticals Inc. amended its credit agreement with Oaktree Fund Administration, LLC as administrative agent on Sept. 5 to provide for $121.5 million principal amount of loans, including about $20 million of new term loans, according to an 8-K filed with the Securities and Exchange Commission.

At closing, the company drew $4.5 million of the first-lien tranche B loans, in addition to $3 million previously funded and announced on Aug. 21, and it will have the right to draw $12.5 million of additional tranche B term loans during 2023, subject to achievement of some strategic transaction process milestones, satisfaction of minimum net revenue and product units sold covenants and satisfaction of other covenants.

The first-lien tranche A provides for an original principal loan of $101.5 million, consisting of $51.4 million exchanged for existing tranche A-1 term loans, a $5 million forbearance fee, $9.1 million exchanged for existing tranche A-2 term loans and $36 million exchanged for the right to future revenue interest payments.

Interest will be paid in kind on both the tranche A and tranche B term loans through the end of the forbearance period, which was extended to Dec. 31 under the amended credit agreement, and accrues at SOFR plus 1,075 basis points. The first-lien tranche B is entitled to a 2x multiple on invested capital. The tranche A lenders and tranche B lenders will be entitled to be repaid a maximum amount of about $141.5 million – assuming the entire $20 million of tranche B loans are funded – plus PIK interest on the tranche A term loan.

The amounts outstanding under the amended credit agreement are secured and collateralized by all of the company’s assets. The amended credit agreement also provides for certain modifications to the existing covenants, including additional reporting obligations, minimum net revenue and product units sold covenants and additional milestones.

Impel also agreed to issue the tranche B lenders and some of their affiliates warrants to purchase 4,749,800 shares of common stock. A total of 1,781,175 warrants were issued at signing of the amendment. Up to 2,968,625 warrants will be issued on a pro rata basis in connection with each subsequent draw by the company of tranche B loans. The warrants are exercisable for seven years or upon the consummation of a change of control, whichever occurs earlier.

The company reported in a 10-Q filing on Aug. 18 that it was in negotiations with Oaktree seeking a forbearance and amendment agreement to remedy its then-current and anticipated non-compliance with its covenants under its senior credit agreement. Impel said at that time that it was continuing to evaluate potential financing, business development and other strategic alternatives in light of its liquidity position. Potential strategic alternatives, it said, may include restructuring or refinancing of its debt, seeking additional debt or equity capital, reducing or delaying business activities, a sale of all or a portion of the company, a combination of these, or other strategic transactions.

The Seattle-based, commercial-stage pharmaceutical company focuses on developing intranasal drug treatments.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.