Why did Regeneron terminate these warrant agreements?

Regeneron terminated these warrant agreements because the underlying convertible senior notes, issued in 2011, matured on October 1, 2016, and are no longer outstanding. The warrants were related to these notes and their associated hedging transactions, making their termination a logical step following the note maturity.

What was the total cost to Regeneron for these terminations?

The total cost to Regeneron for terminating the warrant agreements was $87.8 million ($74.9 million paid to Citibank and $12.9 million paid to Credit Suisse).

Will these terminations have any impact on Regeneron's ongoing operations or future financing?

These terminations primarily relate to historical financing arrangements tied to matured debt. While there is a cash outlay of $87.8 million, it effectively resolves outstanding obligations related to the past convertible notes. This action is unlikely to have a direct negative impact on ongoing operations, and may simplify the company's capital structure by removing these associated warrant obligations.

When were the original convertible notes issued and when did they mature?

The 1.875% convertible senior notes, in connection with which these warrants were issued, were originally issued in 2011 and matured on October 1, 2016.

REGN 8-K: Material Agreements

Summary

Regeneron Pharmaceuticals, Inc. (REGN) announced on November 14 and 15, 2016, the termination of material definitive agreements related to warrant agreements with Citibank, N.A. and Credit Suisse Capital LLC, respectively. These warrants were originally issued in connection with the company's 1.875% convertible senior notes, which have since matured and are no longer outstanding. The termination of these agreements resulted in the reduction of outstanding warrants held by both Citibank and Credit Suisse to zero. Regeneron paid an aggregate of $74.9 million to Citibank and $12.9 million to Credit Suisse to effect these terminations. These actions effectively close out all outstanding warrant obligations tied to the previously matured convertible notes.

Key Highlights

1Termination of warrant agreements with Citibank, N.A. and Credit Suisse Capital LLC.
2Warrants were originally issued in connection with now-matured 1.875% convertible senior notes.
3Citibank's warrant holdings reduced to zero upon termination.
4Credit Suisse's warrant holdings reduced to zero upon termination.
5Regeneron paid $74.9 million to Citibank for termination.
6Regeneron paid $12.9 million to Credit Suisse for termination.
7The termination agreements include customary representations and warranties.

REGENERON PHARMACEUTICALS, INC. 8-K Report, Agreement Terminated (Nov 18, 2016)

Summary

Key Highlights

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