Synergy Pharmaceuticals Inc (NASDAQ: SGYP) looked like it was headed for a rough start this morning. After starting the pre-market trading off in the red, the company released a PR about an hour ago, leading to excitement and allowing for a recovery to the green. In the release, the company focused on an announcement of an amendment to a key debt agreement. Today, we’ll talk about:
- The amendment;
- what we’re seeing from SGYP;
- and what we’ll be watching for with regard to the stock ahead.
SGYP Announces Debt Restructuring
As mentioned above, Synergy Pharmaceuticals is having a relatively strong start to the trading session this morning after announcing news surrounding an amendment to a debt agreement. In a press release issued about an hour ago, the company announced that it has received a waiver to extend the draw down date of the second borrowing under its Term Loan Agreement with CRG LP. The extension will push the draw down date from June 30, 2018 to August 29, 2018. In a statement, Gary Gemignani, EVP and Chief Financial Officer at SGYP, had the following to offer:
This waiver provides us with additional time and flexibility while we continue to assess various strategic options that align with our commitment to maximize shareholder value… We appreciate CRG’s continued support and willingness to work with us during this ongoing strategic review. We look forward to providing an update on or before we report our second quarter 2018 results on August 9th.
Under the terms of the amended Term Loan Agreement, SGYP has the ability to get its hands on up to $100 million in 2018 in three tranches. This provides for future potential borrowing amounts in the amount of $25 million, $25 million and $50 million on or before August 29, 2018, September 30, 2018 and Decemberr 31, 2018. Of course, the borrowing of these funds is subject to the satisfaction of certain borrowing conditions at the time of the transaction.
What We’re Seeing From The Stock
With the news that Synergy Pharmaceuticals now has stronger options with regard to borrowing, it’s no surprise to see that excited investors are sending the stock on a run for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:00), SGYP is trading at $1.85 per share after a gain of $0.04 per share or 2.21% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on SGYP. In particular, we’re interested in following the story surrounding the company’s potential use of the funding mentioned above as well as Trulance sales and the company’s continued development of various treatments in various indications. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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