Alimera Sciences announced that it has entered into a $40 million term loan agreement with Solar Capital Ltd. Alimera will use the proceeds of this funding to pay off an existing $35 million term loan along with related fees and expenses, and to provide additional working capital for general corporate purposes.
“Working with Solar Capital provides us with a long-term partner and a stable debt facility over the next few years,” Dan Myers, Alimera’s chief executive officer, said in a company news release. “Further, eliminating the restrictive liquidity covenants in our existing loan will unlock more working capital to invest in our business.”
Interest on outstanding borrowing under the term loan is payable at one-month LIBOR plus 7.65% per annum. The term loan’s current interest rate is 9.2%. The term loan, which matures on July 1, 2022, provides for interest only payments for the first 30 months. If Alimera meets certain revenue thresholds, it can extend the interest only period to 36 months followed by 18 months of principal and interest.
In connection with the term loan, Alimera paid Solar Capital a $400,000 fee at closing, and Alimera is obligated to pay a $1.8 million fee upon repayment of the term loan in full ($2.0 million if the interest only period has been extended), and additional fees not to exceed $2.0 million in total on a change in control or the achievement of certain sales milestones. No warrants were issued in connection with the term loan. For more details on the terms of the refinancing, see Alimera’s Current Report on Form 8-K, which Alimera expects to file with the SEC promptly.