LivePerson exchanges $341.1 million debt for cash and securities

LivePerson Inc. (NASDAQ: LPSN) announced that holders of $341.1 million in convertible senior notes due 2026 have agreed to exchange their debt for a combination of $45.0 million in cash, $115.0 million in new secured notes, and equity representing 39% of the company's fully diluted common stock.

The exchange will reduce LivePerson's debt by $226 million and extend the company's financial runway through 2029, according to a press release statement. The transaction is expected to close by the end of September, subject to customary closing conditions.

The new 10% senior subordinated secured notes will mature on December 15, 2029, and will be guaranteed by certain subsidiaries and secured by substantially all company assets. The notes will carry a second-priority lien structure.

As part of the deal, noteholders will receive shares of Series B Fixed Rate Convertible Perpetual Preferred Stock and common stock. The preferred shares will be convertible into common stock if shareholders approve a charter amendment to increase authorized share capital at a future special meeting.

"This exchange captures $181 million of debt discount that accretes to shareholders, deleverages the balance sheet by $226 million, and extends LivePerson's runway through 2029," said John Collins, CFO and COO.

If the preferred stock remains outstanding after one year, the dividend rate will increase from 15% to 20% annually. The company's executive officers have indicated they will vote in favor of the proposed charter amendment.

LivePerson provides conversational AI and digital transformation services to enterprise customers. Additional transaction details will be filed in a Form 8-K with the Securities and Exchange Commission.

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