Savient Pharma (SVNT) Enters Debt Restructuring, Financing Agreements

May 8, 2012 6:35 AM EDT
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Savient Pharmaceuticals, Inc. (Nasdaq: SVNT) has entered into definitive agreements with certain holders of its currently outstanding 4.75% convertible senior notes due 2018 (the "Existing Notes"). Pursuant to the terms of the definitive agreements, upon the closing of the transactions contemplated therein, which is expected to occur on May 9, 2012, subject to certain customary closing conditions, the Company will raise approximately $44 million in net proceeds and extend the maturity date of approximately 50% of the Existing Notes by approximately 15 months.

The transactions contemplated by the definitive agreements consists of an exchange by certain holders of the Company's Existing Notes for units ("Units") comprised of senior secured discount notes due 2019 ("New Notes") and warrants to purchase shares of the Company's Common Stock at an exercise price equal to a 15% premium to the closing price of the Company's Common Stock on May 4, 2012 (the "Warrants"), and the further sale of additional Units to such Holders. The New Notes will be secured by a first priority security interest in and liens on certain of the assets and properties of the Company and its subsidiaries. In the aggregate, the transaction results in the cancellation of approximately $108 million in principal amount of Existing Notes, the issuance at a discount of approximately 26% by the Company of approximately $171 million in principal amount of New Notes, and the issuance by the Company of Warrants to purchase four million shares of its common stock. The New Notes will have a cash coupon of 3% in the first three years and a cash coupon of 12% per year thereafter, which will provide the Company with additional liquidity in the near term as compared to the Existing Notes, which have a cash coupon of 4.75%.

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