J. Wood Capital Advisors advises Intercept pharmaceuticals on the exchange of $389mm of its senior secured convertible notes for cash and shares
August 2022 | Press release
Transaction Background
Intercept (“ICPT” or “the company”) issued a senior secured convertible note (JWCA as Placement Agent) one year ago to help manage upcoming liabilities. Recently, with cash sale of its international business and positive stock price momentum, the Company wanted to utilize the new liquidity to further optimize its balance sheet.
Company objectives:
De-lever: retire the convertible to lower debt balance and interest expense
Use stock efficiently to minimize market and stock price risk
Minimize transaction and friction costs; execute as efficiently as possible
JWCA acted as Exchange Agent for the transaction and provided analysis and advice around:
Evaluating tactics around investor targeting and execution method
Balancing exchange considerations to minimize repurchase price and friction costs
Investor outreach, negotiation, and execution of exchanges
Results
The Company successfully de-levered by delivering a mix of cash and shares of its stock to retire the convertible:
Exchanged ~$388.9mm of the convertible notes (78% of outstanding) for ~$258.2mm cash and ~11.3mm shares of stock
Avoided stock selling: the shares delivered to investors simply covered their existing hedge positions, with no expected selling in the open market
Confidential execution: the transaction was negotiated privately with a small group of holders