Senseonics (NYSE:SENS) announced today that it entered into a new senior secured term loan agreement worth $15 million with potential for an additional $5 million.
The agreement is with certain funds managed by existing stakeholder Highbridge Capital Management. Senseonics is slated to draw down $15 million from the new first lien secured term loan with a maturity date of Oct. 24, 2021.
Senseonics’ first lien term loan will pay interest in cash at a 12% annual rate or, at Senseonics’ option, payment in kind at a 13% annual rate. The company may also draw the remaining $5 million from the first lien term loan within 120 days, subject to certain conditions. Senseonics issued 1.5 million shares of common stock to the lenders of the first lien term loan as a commitment fee.
The continuous glucose monitoring system developer also announced an exchange agreement with funds managed by Highbridge providing for $24 million in its outstanding 5.25% senior convertible notes due in 2025 with nearly $15.7 million in newly issued second lien secured notes due on Jan. 24, 2022 and more than 11 million shares of Senseonics’ common stock.
In connection with the exchange, Senseonics is set to issue warrants to holders of the second lien notes to purchase 4.5 million shares of its common stock at 66¢ per share at any time through the third anniversary of their issuance. The second lien notes will pay interest in cash at a 7.5% annual rate or, at Senseonics’ option, 8.25%.
Senseonics expects the transaction to close on or about April 24.
“This financing immediately improves Senseonics’ liquidity and financial stability,” Senseonics president & CEO Tim Goodnow said in a news release. “When combined with our existing cash and cash equivalents, along with our previously announced cost-reduction measures, we believe this credit facility will provide the company with sufficient funding to fully explore strategic opportunities, as previously announced.
“At the same time, we believe the facility provides resources to complete our value-enhancing development activities for the Eversense XL CGM system for use up to 180days in the U.S., including submission to seek FDA approval for commercial distribution.”