Gossamer Bio launches debt exchange offer to eliminate $120 million

Gossamer Bio Inc. (NASDAQ: GOSS) announced an exchange offer to swap its existing convertible notes for new securities, aimed at eliminating over $120 million in debt. The biopharmaceutical company said holders of approximately 75.2% of its 5.00% Convertible Senior Notes due 2027 have agreed to support the transaction.

Under the exchange offer, Gossamer Bio will trade its $200 million in existing convertible notes for up to $72 million in new 7.50% Convertible Senior Secured First Lien Notes due 2030, along with up to 317.6 million shares of common stock or prefunded warrants. Early participants will also receive purchase warrants.

The new convertible notes will carry a 7.50% annual interest rate and mature on July 1, 2030, unless converted or repurchased earlier. The notes will be secured, first lien obligations of the company. A springing maturity provision will accelerate the due date to March 2, 2027 if more than $4 million of existing notes remain outstanding at that time.

The exchange offer requires that holders of at least 98% of the existing notes participate for the transaction to proceed. The offer expires at 5:00 p.m. New York time on June 16, 2026, with an early tender deadline of June 1, 2026.

Holders who tender their notes by the early deadline will receive $360 in new notes, 1,588.24 shares of common stock and 750 purchase warrants for each $1,000 of existing notes exchanged. Those who tender after the early deadline will receive the same consideration but no purchase warrants.

The company is simultaneously seeking consent from existing noteholders to eliminate substantially all restrictive covenants in the current indenture. Cantor Fitzgerald & Co. is serving as dealer manager for the transaction.

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