JWCA advises MannKind on the exchange of ~$194mm convertible notes for shares and cash

December 2024 | read press release

Transaction Background

MannKind Corporation (“MNKD” or, the “Company”) opportunistically exchanged ~$193.7mm  (~84%) of its outstanding 2.50% convertible due 2026 into shares and cash in order to manage its debt maturities and capital structure

MannKind’s objectives included:

• De-lever: retire a majority of the convertible to reduce the Company’s total debt balance

• Minimize transaction and friction costs; execute as efficiently as possible

JWCA acted as Exchange Agent for the transaction and provided the following support for the Company:

• Provided analysis and advice around tactics related to investor targeting and engagement

• Analyzed transaction alternatives, including use of soft-call feature

• Led the investor outreach, negotiation, and execution of repurchases

Results

The Company successfully de-levered by delivering a mix of cash and shares of its stock to retire the convertible:

• Exchanged ~$193.7mm of the convertible notes (~84% of outstanding) for ~$89.2mm cash and ~26.7mm shares of common stock

• Avoided market risk by structuring transaction so that the shares delivered to investors simply covered their existing hedge positions

• Confidential execution: the transaction was negotiated privately with a small group of holders

• Reduced annual interest by ~$4.9mm and potential savings of ~10.4mm shares of dilution out of ~37.2mm underlying shares reserved for conversion for $193.7mm notional