- Mesoblast (MSB) refinances existing senior debt facility with new, roughly $124 million, five-year facility with Oaktree Capital Management
- MSB has drawn the first tranche of roughly $82.8 million to repay the outstanding balance of its existing debt with Hercules Capital
- The facility has a three-year interest only period, after which time 40 per cent of the principal amortises over two years, with final payment due by November 2026
- MSB is working towards bringing its first product to the US market and says Oaktree is an “excellent fit” for its commercial growth strategy
- Shares have been trading 1.1 per cent lower at $1.70
Mesoblast (MSB) has refinanced its existing senior debt facility with a new, roughly $124 million, five-year facility with Oaktree Capital Management.
The allogeneic cellular medicine developer has drawn the first tranche of US$60 million (A$82.8 million) under the new facility, to repay the outstanding balance of its existing debt with Hercules Capital.
Subject to certain milestones, MSB can draw up to an additional US$30 million (A$41 million) on or before December 31.
The facility has a three-year interest only period, at a rate of 9.75 per cent per annum, after which time 40 per cent of the principal amortises over two years, with final payment due by November 2026.
Oaktree will also receive warrants to purchase roughly 1.7 million American Depositary shares at US$7.26 each, to be exercised within seven years of issuance.
The cost of the shares represents a 15 per cent premium to the 30-day volume weighted average price.
Moreover, the agreement to issue the warrants is subject to approval of Mesoblast shareholders, if required at the time of issue, pursuant to the 15 per cent placement limit in listing rule 7.1.
Mesoblast is developing product candidates for distinct indications based on its remestemcel-L and rexlemestrocel-L stromal cell technology platforms.
So far, two products have been commercialised in Japan and Europe by Mesoblast’s licensees, and the company has established commercial partnerships in Europe and China for certain Phase 3 assets.
Mesoblast is working towards bringing its first product to the US market, and Chief Executive Silviu Itescu said the company is pleased to have Oaktree as its new financing partner during this time.
“Oaktree has a demonstrated partnership approach to innovative companies, making it an excellent fit to support Mesoblast’s commercial growth strategy over the next five years,” Mr Itescu said.
Shares last traded 1.1 per cent lower at $1.70 at 1:27pm AEDT.