- Proceeds will be used to redeem all outstanding Linaclotide PhaRMASM
11% Notes -
- Refinancing reduces cost of capital with interest rate of 8.375% -
- Transaction expected to fund in early January 2017, subject to and
concurrent with redemption of existing PhaRMA Notes -
CAMBRIDGE, Mass.--(BUSINESS WIRE)--
Ironwood
Pharmaceuticals, Inc. (NASDAQ:IRWD) today announced the closing of a
$150 million debt refinancing. Ironwood will use the net proceeds from
this transaction to redeem the remaining principal balance of its
existing Linaclotide PhaRMA 11% Notes due 2024.
The $150 million in aggregate principal amount of Notes will have a
legal maturity of September 15, 2026 and will bear an annual interest
rate of 8.375%. Interest on the 8.375% Notes will be paid quarterly
beginning June 15, 2017, and principal will be payable quarterly
beginning March 15, 2019. Issuance of the 8.375% Notes is subject to
full redemption of the existing PhaRMA Notes. The 8.375% Notes and the
existing PhaRMA Notes are expected to be issued and redeemed,
respectively, in early January 2017 when the prepayment penalty
associated with the existing PhaRMA Notes ceases.
Consistent with the PhaRMA Notes payment structure, Ironwood will make
quarterly payments on the 8.375% Notes after the interest-only period in
an amount equal to the greater of (i) 7.5% of net sales of linaclotide
in the United States for the preceding quarter ("the synthetic royalty
amount") and (ii) accrued and unpaid interest on the 8.375% Notes ("the
required interest amount"). Principal on the 8.375% Notes will be repaid
in an amount equal to the synthetic royalty amount minus the required
interest amount, when this is a positive number, until the principal has
been paid in full. Given that the principal payments on the 8.375% Notes
are based on the synthetic royalty amount, which will vary from quarter
to quarter, the 8.375% Notes are expected to be fully repaid prior to
the final maturity date in 2026.
The 8.375% Notes will be secured by a security interest in a segregated
bank account established to receive the required quarterly payments, as
well as certain limited accounts receivables, payment intangibles or
other rights to payment or proceeds, in each case, up to the synthetic
royalty amount or its estimated equivalent, as applicable. The 8.375%
Notes are not convertible into Ironwood equity. The 8.375% Notes may be
redeemed at any time prior to maturity, in whole or in part, at the
option of Ironwood at specified redemption premiums.
Funds affiliated with TSSP, a leading special situations investment
platform, will be the purchasers of the 8.375% Notes.
For further details on the terms and conditions of the 8.375% Notes,
please refer to the Form 8-K filed today with the Securities and
Exchange Commission.
The current principal balance on the existing PhaRMA Notes is
approximately $143 million.
About Ironwood Pharmaceuticals
Ironwood
Pharmaceuticals (NASDAQ: IRWD) is a commercial biotechnology company
focused on creating medicines that make a difference for patients,
building value for our fellow shareholders, and empowering our
passionate team. We are advancing a pipeline of innovative medicines in
areas of significant unmet need, including irritable bowel syndrome with
constipation (IBS-C)/chronic idiopathic constipation (CIC), uncontrolled
gout, refractory gastroesophageal reflux disease, and vascular and
fibrotic diseases. We discovered, developed and are commercializing
linaclotide, the U.S. branded prescription market leader in the
IBS-C/CIC category, and we are applying our proven R&D and commercial
capabilities to advance multiple internally-developed and
externally-accessed product opportunities. Ironwood was founded in 1998
and is headquartered in Cambridge, Mass. For more information, please
visit www.ironwoodpharma.com;
information that may be important to investors will be routinely posted
in this location.
This press release contains forward-looking statements. Investors are
cautioned not to place undue reliance on these forward-looking
statements, including statements about our expectations concerning the
completion of the issuance and sale of the 8.375% Notes, the timing of
the repayment of the 8.375% Notes and the timing of, and our ability to
complete, the redemption of the PhaRMA Notes. Each forward-looking
statement is subject to risks and uncertainties that could cause actual
results to differ materially from those expressed or implied in such
statement. Applicable risks and uncertainties include the risk that we
are unable to successfully complete the issuance and sale of the 8.375%
Notes and the redemption of the PhaRMA Notes and the repayment of the
8.375% Notes prior to September 15, 2026; and the risks listed under the
heading "Risk Factors" and elsewhere in Ironwood's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2016, and in our subsequent SEC filings.
These forward-looking statements (except as otherwise noted) speak only
as of the date of this press release, and Ironwood undertakes no
obligation to update these forward-looking statements.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160926005507/en/
Media Relations:
Trista Morrison, 617-374-5095
Director,
Corporate Communications
[email protected]
or
Investor
Relations:
Meredith Kaya, 617-374-5082
Director, Investor
Relations
[email protected]
Source: Ironwood Pharmaceuticals, Inc.
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