Is Deefield debt callable?

[flipflop88]

Hi all,

Not posting often but reading quite a lot here.

One question I had in mind recently and for which I could not find any answer yet: Is DF debt callable and could the last installement be repaid already/or does it have in July necessary?

I read a lof of ideas about financing, bringing new capital or equity partners - but this is an important consideration. If they cannot repay until the deadline, there might be some partners awaiting for this milestone. If it is callable, then the debt could have repaid anytime to unlock the assets and so was not a barrier to new opportunities.

Best

[mnkdfann]

The SEC documents I've looked at say nothing about it being callable.

But even so, I can't see Deerfield complaining were Mannkind to propose payment in advance in cash. Anything is negotiable.

[matt]

Usually debts like Deerfield's are not callable, but an alternate procedure known as defeasance works almost as well.  In a defeasance the money is paid, usually in the form of US Treasury bonds, into a trust administered by a third-party bank and the debt can then be removed from the books.  As the debt comes due, the trustee makes the required payments.

Practically speaking, no sophisticated party will care about the difference between a May and July expiration of the Deerfield obligations so the remaining Deerfield debt is not a barrier to getting some other deal done.  What is a barrier is the fact that both the Mann Group and the convertible bond holders have security interests that get promoted in seniority when Deerfield goes away.  Both of those parties would have to agree to be subordinated in order for some new party to have a senior claim on the assets, and that would be a very difficult discussion to have with either group as the trustees have little discretion to negotiate beyond the language of the trust indenture.

[flipflop88]

Thanks both your replies.

[boca1girl]

I asked Rose if management considered paying off Deerfield early and she said it was discussed but not deemed necessary.