Loan & DebtJun 22, 2026, 07:21 AM
Ligand Announces $550M Convertible Senior Notes Offering
AI Summary
Ligand Pharmaceuticals announced a proposed private offering of $550 million in convertible senior notes due 2031, with an option for initial purchasers to acquire an additional $82.5 million. Concurrently, the company amended its Credit Agreement to facilitate this offering and adjusted its minimum Consolidated EBITDA covenants to $100 million for the next year and $150 million thereafter. Ligand plans to use a portion of the net proceeds, up to $75 million, to repurchase its common stock and fund convertible note hedge transactions to mitigate potential dilution, with the remainder allocated to general corporate purposes and the acquisition of Xoma Royalty Corporation.
Key Highlights
- Proposed offering of $550 million aggregate principal amount of convertible senior notes due 2031.
- Initial purchasers have an option to buy an additional $82.5 million in notes.
- Amended Credit Agreement to permit the notes issuance and adjust EBITDA covenants.
- Minimum Consolidated EBITDA set to $100 million for periods ending June 30, 2026, to March 31, 2027.
- Minimum Consolidated EBITDA set to $150 million for periods ending after March 31, 2027.
- Up to $75 million of net proceeds to be used for common stock repurchases.
- Proceeds will also fund convertible note hedge transactions to reduce dilution.
- Remaining proceeds for general corporate purposes, including Xoma Royalty Corporation acquisition.
Price Impact
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