Arrowhead Pharmaceuticals has refinanced its senior secured term loans by entering into a new $400 million senior secured term loan facility with Sixth Street. This new agreement lowers borrowing costs, extends the debt maturity to 2031, and provides greater operational and financial flexibility. The proceeds were used to repay the company's existing financing agreement at a significant discount.
Key Details
- New Credit Facility: A $400 million senior secured term loan maturing on November 2, 2031, with an interest rate of SOFR + 5.50%, a significant reduction from the previous 15% fixed rate.
- Repayment and Savings: The company repaid its existing debt for approximately $404.4 million, representing a discount of ~$68 million from the contractual minimum repayment amount that would have been owed.
- Improved Covenants: The new agreement eliminates mandatory prepayments from product sales or partnership proceeds and reduces the minimum cash covenant from $150 million to $125 million, increasing strategic flexibility.