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 credit facility provided by existing Mesoblast shareholder and director, Dr Gregory George. A second tranche of up to US$50 million is available at Mesoblast’s option until June 30, 2026. Mesoblast develops allogeneic (off-the-shelf) cellular medicines for the treatment of severe and life-threatening inflammatory conditions. Its therapies respond to severe inflammation by releasing anti-inflammatory factors, modulating the immune system to reduce damaging inflammatory processes.
The new credit line features a fixed interest rate of 8.00% per annum, a significant reduction from Mesoblast’s previous debt facilities, and includes a five-year interest-only period. The initial US$75 million is unsecured until the remaining NovaQuest debt is repaid, no later than July 8, 2026. After this, the entire facility (up to US$125 million) will be secured solely by the Temcell royalty. 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.
According to Mesoblast, the new facility offers a substantially lower overall cost compared to existing arrangements. It can be repaid at any time without incurring early prepayment or make-whole fees and does not include exit fees. Importantly, the facility does not encumber any of Mesoblast’s material assets or intellectual property and places no restrictions on additional unsecured debt or licensing activities.
Mesoblast Chief Executive Dr. Silviu Itescu stated that the company greatly appreciates the support of its largest shareholder, who provided the most commercially compelling facility after a competitive process. He added that this facility substantially lowers the company’s cost of capital and frees up all major assets, providing total flexibility for strategic partnerships and commercialisation.
