On March 9, 2020, BridgeBio Pharma, Inc. ("BridgeBio") reported an aggregate of $550.0 million aggregate principal amount of its 2.50% Convertible Senior Notes due 2027 (the "Notes"), pursuant to an Indenture dated March 9, 2020 (the "Indenture"), between BridgeBio and U.S. Bank National Association, as trustee (the "Trustee"), in a private offering to qualified institutional buyers (the "Note Offering") pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") (Filing, 8-K, BridgeBio, MAR 9, 2020, View Source [SID1234555340]). The Notes issued in the Note Offering include $75.0 aggregate principal amount of Notes sold to the initial purchasers in (the "Initial Purchasers") pursuant to the exercise in full of the Initial Purchasers’ option to purchase additional Notes.
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
The Notes are senior, unsecured obligations of BridgeBio and will accrue interest payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2020, at a rate of 2.50 % per year. The Notes will mature on March 15, 2027, unless earlier converted or repurchased. The Notes are convertible into cash, shares of BridgeBio’s common stock or a combination of cash and shares of BridgeBio’s common stock, at BridgeBio’s election.
The net proceeds BridgeBio received from the Note Offering are equal to approximately $537.0 million, after deducting the Initial Purchasers’ discount and estimated offering expenses payable by BridgeBio. BridgeBio used approximately $49.3 million of the net proceeds from the Note Offering to pay the cost of the Capped Call Transactions described below, and approximately $75.0 million to pay the cost of Repurchases of shares of its common stock described below. BridgeBio intends to use the remainder of the net proceeds from the Note Offering for working capital and other general corporate purposes, including for its commercial organization and launch preparations. BridgeBio may also use any remaining net proceeds to fund possible acquisitions of, or investments in, complementary businesses, products, services and technologies. BridgeBio has not entered into any agreements or commitments with respect to any material acquisitions or investments at this time.
A holder of Notes may convert all or any portion of its Notes at its option at any time prior to the close of business on the business day immediately preceding December 15, 2026 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2020 (and only during such calendar quarter), if the last reported sale price of BridgeBio’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the "measurement period") in which the "trading price" (as defined in the Indenture) per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of BridgeBio’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On or after December 15, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its Notes at any time, regardless of the foregoing.
The conversion rate will initially be 23.4151 shares of BridgeBio’s common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $42.71 per share of BridgeBio’s common stock). The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, BridgeBio will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event.
BridgeBio may not redeem the Notes prior to the maturity date, and no sinking fund is provided for the Notes.
If BridgeBio undergoes a fundamental change (as defined in the Indenture), holders may require BridgeBio to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding may declare the entire principal amount of all the Notes plus accrued special interest, if any, to be immediately due and payable.
The Notes are BridgeBio’s general unsecured obligations and rank senior in right of payment to all of BridgeBio’s indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment with all of BridgeBio’s liabilities that are not so subordinated; effectively junior to any of BridgeBio’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of BridgeBio’s subsidiaries.
A copy of the Indenture and form of Note are filed as Exhibit 4.1 and Exhibit 4.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein. The foregoing description of the Indenture and Notes does not purport to be complete and is qualified in its entirety by reference to such exhibits.