Announces Debt Exchange by Guardant Health
Guardant Health, Inc. (Nasdaq: GH), a leader in precision oncology, has announced a strategic move to strengthen its financial position through a debt exchange transaction. On February 6, 2025, the company entered into privately negotiated exchange agreements (the “Exchange Agreements”) with certain holders of its outstanding 0% Convertible Senior Notes due 2027 (the “2027 Notes”). Under these agreements, Guardant Health will issue $600 million aggregate principal amount of 1.25% Convertible Senior Notes due 2031 (the “New Notes”) in exchange for the retirement of approximately $659.3 million principal amount of its 2027 Notes.
The transaction, expected to close on or about February 14, 2025, is subject to customary closing conditions. Upon completion of the exchange, approximately $490.7 million of the 2027 Notes will remain outstanding, with their terms unchanged. In exchange, the company will issue the $600 million aggregate principal amount of New Notes, with an initial conversion rate of 16.0716 shares of Guardant Health’s common stock per $1,000 principal amount of New Notes. This conversion rate reflects an initial conversion price of approximately $62.22 per share of common stock, representing a conversion premium of about 35% over the last reported sale price of Guardant Health’s common stock on February 6, 2025.
Terms of the New Notes
The New Notes are due on February 15, 2031, and will carry an interest rate of 1.25%. The decision to convert the 2027 Notes into the New Notes is part of Guardant Health’s ongoing efforts to manage its debt and enhance its financial flexibility. With a lower interest rate and a longer maturity date, the New Notes are expected to provide the company with an improved financial position for the long term, reducing short-term debt obligations while maintaining growth potential in the precision oncology market.
Share Repurchases
As part of this transaction, Guardant Health also plans to repurchase approximately $45 million worth of its common stock. The company intends to repurchase these shares from certain participants in the exchange transaction through a financial intermediary at the last reported sale price of the common stock on February 6, 2025. In addition, the exchange agent for the Transactions intends to purchase approximately $35 million of shares of Guardant Health’s common stock, further supporting the company’s commitment to enhancing shareholder value and improving financial stability.
SEC Filing
Guardant Health has announced that it will file a Current Report on Form 8-K with the U.S. Securities and Exchange Commission (SEC) to provide additional details regarding this transaction. The SEC filing will include more comprehensive information about the terms of the exchange agreements, as well as the share repurchases and their potential impact on the company’s overall financial structure.
J. Wood Capital Advisors LLC acted as the exchange agent to Guardant Health in connection with these debt exchange transactions, ensuring the process proceeds smoothly and according to regulatory requirements.
Regulatory Considerations
It is important to note that the New Notes and any shares of common stock issued upon conversion have not been registered under the Securities Act of 1933 or any state securities laws. As a result, these securities cannot be offered or sold in the United States unless registered or exempt from registration requirements. The press release issued by Guardant Health does not constitute an offer to sell, nor is it a solicitation for the purchase of the 2027 Notes, New Notes, or Guardant Health’s common stock. There will be no sale of these securities in any state or jurisdiction where such an offer or sale would be unlawful before registration or qualification under the securities laws of that jurisdiction.
About Guardant Health
Guardant Health is a leading precision oncology company, committed to transforming patient care through advanced diagnostics. Founded in 2012, the company is focused on providing critical insights that help to detect, monitor, and treat cancer. Its innovative blood and tissue tests, powered by artificial intelligence (AI) analytics and real-world data, enable more accurate cancer detection and provide crucial guidance for personalized treatment options.
Guardant Health’s offerings span all stages of cancer care. From screening for early cancer detection to monitoring for recurrence in early-stage cancer, and providing treatment selection for patients with advanced cancer, the company is at the forefront of precision oncology. With a deep commitment to advancing cancer care, Guardant Health continues to push boundaries and accelerate new therapies to improve patient outcomes.
Guardant Health’s technology plays a significant role in the fight against cancer by providing doctors and patients with data that drives better decisions and, ultimately, better outcomes. As the company continues to expand its footprint in oncology, the recent debt exchange transaction is an important step toward securing the financial stability needed to fund its ongoing innovations.
In summary, the recent debt exchange transaction is part of Guardant Health’s long-term strategy to enhance its financial strength while continuing to lead the way in precision oncology. By reducing short-term debt obligations and securing capital for future growth, the company is positioning itself to expand its market share and improve cancer care across the globe.
