Travere plans $400 million convertible notes offering to refinance debt

Travere Therapeutics Inc. (NASDAQ: TVTX) announced its intention to offer $400 million in convertible senior notes due 2032, subject to market conditions. The company also plans to grant underwriters a 30-day option to purchase up to an additional $60 million in notes to cover over-allotments.

The notes will be senior unsecured obligations that accrue interest payable semiannually. They will be convertible under certain circumstances into cash, shares of Travere's common stock, or a combination of both, at the company's election. The interest rate, initial conversion rate and other terms will be determined at pricing.

Travere intends to use a portion of the net proceeds to repurchase some of its outstanding 2.25% senior convertible notes due 2029 for cash, depending on negotiations and pricing. The company is negotiating these repurchases with certain holders of the 2029 notes, though no assurance can be given regarding the amount or price of any repurchases.

The remaining proceeds will be used for general corporate purposes, including commercialization expenses, clinical trial and research and development expenses, capital expenditures, working capital and administrative expenses.

The company expects that holders of 2029 notes who agree to repurchases and have hedged their equity price risk may unwind hedge positions by buying Travere's common stock or entering into derivative transactions. This activity may be substantial relative to historical trading volume and could increase the effective conversion price of the new notes.

J.P. Morgan, Jefferies and Leerink Partners are serving as joint book-running managers for the offering. The offering has been registered under the Securities Act of 1933 through a registration statement filed with the Securities and Exchange Commission on August 1, 2024.

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