Mesoblast Limited completed a refinancing that replaces its higher‑cost senior secured loan from Oaktree Capital Management and a subordinated royalty facility from NovaQuest Capital with a new five‑year credit line provided by shareholder and director Dr. Gregory George. The company drew $75 million from the line, which can be expanded to $125 million by June 30 2026 and carries an 8.00 % fixed interest rate with a five‑year interest‑only period.
The new facility is unsecured until the NovaQuest debt is repaid; thereafter it will be secured solely by the Temcell 1 royalty. The refinancing reduces Mesoblast’s borrowing cost from the previous Oaktree rate of 9.75 % and the NovaQuest rate of 15 % to a single 8.00 % rate, lowering annual interest expense and improving cash‑flow predictability. By removing the encumbrance on the Temcell 1 royalty, the company frees a key asset that can be leveraged for future partnerships or commercialization efforts.
Dr. George will receive five‑year warrants to purchase approximately 323,000 American Depositary Shares at $21.51 per share, a 15 % premium to the 30‑day VWAP, subject to shareholder approval. The warrants align the interests of the largest shareholder with the company’s long‑term performance and provide a potential upside if the share price rises.
Mesoblast’s chief executive, Dr. Silviu Itescu, said the new line “substantially lowers the company’s cost of capital and frees all of its major assets to provide total flexibility for strategic partnerships and commercialization.” The refinancing supports the company’s transition toward commercializing Ryoncil®, which received FDA approval in December 2024 for pediatric steroid‑refractory acute graft‑versus‑host disease. Lower interest costs and greater balance‑sheet flexibility position Mesoblast to invest in clinical development, regulatory approvals, and market expansion without the constraint of asset encumbrances.
Investors responded positively to the refinancing, citing the lower borrowing cost, the removal of asset encumbrances, and the enhanced flexibility to pursue strategic initiatives. The market reaction reflected confidence in Mesoblast’s ability to manage its capital structure while advancing its commercialization pipeline.
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