Arrowhead repays $400 million facility at $68 million discount and refinances it
Key Facts
Arrowhead Pharmaceuticals said on November 4, 2026, that it had completed a refinancing with funds managed by Sixth Street, repaying its previous $400 million facility at a $68 million discount to the contractual minimum repayment amount and replacing it with a new secured loan of the same value. The company said negotiating the discount reduced the amount needed to close out the previous financing. The new agreement changes borrowing costs and repayment terms, while also extending the maturity date for principal. Chief Financial Officer Daniel Abel said the lower repayment amount and ongoing borrowing costs improve the financing’s economics for shareholders. The deal gives investors financing at an interest rate tied to a floating benchmark, while easing restrictions that had linked repayment to company proceeds.
The new loan carries annual interest equal to three-month SOFR plus 5.50%, compared with the retired facility’s fixed annual rate of 15%. Linking the rate to SOFR means the new interest cost will be affected by movements in the benchmark during the loan term. The company said the previous arrangement included a minimum 2x multiple on invested capital if repaid in full by August 2028. The multiple increased to 2.5x after that date, according to Arrowhead’s statement. The $68 million discount was part of negotiations over settling the contractual amount due under the previous facility.
The repayment mechanism tied to the company’s commercial activity also changed. The previous facility required Arrowhead to direct part of the proceeds from specified transactions toward repayment, including upfront and milestone payments from partnerships and commercial revenues. The company said the new loan eliminated those mandatory sweep or advance payments. The new loan also requires no scheduled amortization payments during its term, with the full principal due at maturity. Removing mandatory repayments tied to proceeds is set to give the company greater flexibility to retain cash generated by partnerships and commercial activity, under the financing terms it announced.
The new secured loan matures on November 2, 2031, and its terms allow early repayment at a premium of no more than 2% if repayment occurs more than 18 months after closing. A make-whole payment also applies to any early repayment before May 2, 2028, according to the company’s statement. These terms give the new financing a maturity extending to 2031, with a defined cost for repayment ahead of schedule during the specified periods. Sixth Street partners Jeff Bouthollal and Michael Reslanski said Arrowhead had made significant progress in turning its RNA interference platform into a commercial business with substantial growth opportunities. They added that the new financing structure supports the company’s next phase.
In the background to the deal, Arrowhead said Sixth Street managed assets and committed capital totaling more than $140 billion as of June 30, 2026. The company’s shares, which trade under the ticker ARWR, closed at $59.53 in the November 3 session, according to EL7 data. The closing price was recorded on the day before the refinancing completion was announced. Arrowhead is due to report its fiscal-year results on November 12, the next milestone for investors to track its financial position and spending alongside the new financing terms. As announced by the company, the deal combines settlement of the previous obligation at a discount with a new loan carrying a later maturity date.