Mesoblast Limited (ASX:MSB; Nasdaq:MESO), a global leader in allogeneic cellular medicines for inflammatory diseases, announced it has fully repaid its existing senior secured loan from Oaktree Capital Management and partially repaid its subordinated royalty facility from NovaQuest Capital Management LLC. This was achieved by drawing down US$75 million from a new five-year facility provided by existing Mesoblast shareholder and director Dr Gregory George. A second tranche of up to US$50 million is available to Mesoblast until June 30, 2026.
The new credit line features a fixed interest rate of 8.00% per annum, which represents a substantial reduction from Mesoblast’s previous debt facilities. The initial US$75 million is unsecured until the remainder of the NovaQuest debt is repaid, scheduled for no later than July 8, 2026. After this repayment, the entire facility (up to US$125 million) will be secured solely by the Temcell royalty.
The new facility offers a lower overall cost compared to existing arrangements. It can be repaid at any time without incurring early prepayment fees and does not include exit fees. Furthermore, it does not encumber any of Mesoblast’s material assets or intellectual property and places no restrictions on additional unsecured debt or licensing activities. Dr. George will receive five-year warrants to purchase approximately 323,000 American Depositary Shares (ADSs) at US$21.51 per ADS, a 15% premium to the current 30-day VWAP, subject to shareholder approval.
Mesoblast Chief Executive Dr. Silviu Itescu stated that the company appreciates the support of its largest shareholder, who provided the most commercially compelling facility in a competitive process. He added that the facility substantially lowers the company’s cost of capital and frees up all of its major assets to provide total flexibility for strategic partnerships and commercialization.
