Mintz Advises Sixth Street on $500M Strategic Financing with Arrowhead Pharmaceuticals
Key Facts
- Sixth Street is a global investment firm with over $75 billion in assets under management and committed capital
- Arrowhead Pharmaceuticals develops medicines that treat intractable diseases by silencing the genes that cause them
- Mintz completed a $500 million senior secured credit facility for Arrowhead Pharmaceuticals on behalf of our client Sixth Street
The Situation
Mintz advised global investment firm Sixth Street in a strategic financing agreement with Arrowhead Pharmaceuticals, Inc. TD Cowen acted as investment advisor to Arrowhead. Mintz acted as co-counsel with Proskauer Rose LLP.
The Approach
The credit facility, which matures on August 7, 2031, bears interest at an annual rate of 15%. The credit facility does not provide for scheduled amortization payments during the term, and all principal will be due on the maturity date. Under the terms of the agreement, Arrowhead is required to partially repay loans under the credit facility with a portion of the proceeds from certain transactions, such as the future collection of upfront payments, milestones, and royalties from partnerships and collaborations, as well as commercial revenue by Arrowhead. However, Arrowhead will have the right to prepay loans under the credit facility at any time. All obligations will be secured on a first-priority basis, subject to certain exceptions, by security interests in substantially all assets of the company.
The Outcome
This strategic financing agreement allows Arrowhead to fund innovation and growth opportunities across the company’s pipeline of RNAi therapeutics. The $500 million senior secured credit facility includes $400 million funded at close with an additional $100 million available at Arrowhead’s option, subject to mutual agreement between Sixth Street and Arrowhead, during the seven-year term of the agreement.
