Theratechnologies boosts balance sheet using loan to buy convertibles

By Devika Patel

Knoxville, Tenn., Oct. 17 – Theratechnologies Inc. strengthened its balance sheet last quarter by using $40 million of funding drawn under a recent credit agreement to buy back $30 million of convertibles maturing in June 2023.

On July 13, the company announced it received a binding commitment for up to $100 million to be raised through a non-dilutive term loan with an affiliate of Marathon Asset Management.

On July 27, Theratechnologies announced that it received $40 million of funding under the terms of this credit agreement.

All funds drawn under the credit agreement bear interest at SOFR plus 950 basis points.

A portion of the proceeds was used to buy back and cancel $30 million of convertible notes due June 30, 2023, while the remainder was allocated to working capital.

“The company secured a new non-dilutive $100 million term loan facility with Marathon Asset Management significantly strengthening our balance sheet,” senior vice president and chief financial officer Philippe Dubuc said on the company’s third quarter ended Aug. 31 earnings conference call on Oct. 13.

“The first tranche of $40 million was drawn during the third quarter, which enabled us to buy back $3 million principal amount of convertible debentures,” he said.

Consolidated revenue grew 16.6% in the quarter to $20,811,000.

Theratechnologies is a Montreal-based specialty pharmaceutical company focusing on the medical needs of HIV patients.

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