Immunocore Holdings plcIMCR
Immunocore Holdings plc Debt Disclosure
Non-current interest-bearing loans and borrowings
Non-current interest-bearing loans and borrowings consisted of the following as of December 31, 2024 (in thousands):
Fair Value | |||||||||||||||||
Principal Amount | Unamortized Debt Issuance Costs | Net Carrying Amounts | Amount | Level | |||||||||||||
Convertible senior notes | 402,500 | (11,487) | 391,013 | 337,174 | Level 2 | ||||||||||||
Pharmakon loan | — | — | — | — | Not applicable | ||||||||||||
Non-current interest-bearing loans and borrowings consisted of the following as of December 31, 2023 (in thousands):
Fair Value | |||||||||||||||||
Principal Amount | Unamortized Debt Issuance Costs | Net Carrying Amounts | Amount | Level | |||||||||||||
Convertible senior notes | — | — | — | — | Not applicable | ||||||||||||
Pharmakon loan | 50,000 | (1,989) | 48,011 | 46,100 | Level 2 | ||||||||||||
Interest expense consisted of the following (in thousands):
| 2024 | 2023 | ||||||||||
Convertible senior notes | |||||||||||
Coupon interest | $ | 9,310 | $ | — | |||||||
Amortization of debt issuance costs | $ | 1,875 | $ | — | |||||||
Pharmakon loan | $ | 7,659 | $ | 5,154 | |||||||
Total interest expense | $ | 18,844 | $ | 5,154 | |||||||
Convertible senior notes
On February 2, 2024, the Company completed a private offering (the "Offering") of $402.5 million aggregate principal amount of Notes, including the exercise in full of the initial purchasers’ option to purchase up to an additional $52.5 million principal amount of Notes. The Notes were issued pursuant to an indenture, dated February 2, 2024 (the "Indenture") between the Company and U.S. Bank Trust Company, National Association, as trustee. The Company’s net proceeds from the Offering of the Notes were $389.1 million, after deducting issuance costs of $13.4 million.
The Notes are senior, unsecured obligations of the Company and will mature on February 1, 2030, unless earlier converted, redeemed or repurchased. The Notes will accrue interest payable semi-annually in arrears on February 1 and August 1 of each year, beginning on August 1, 2024, at a rate of 2.50% per year.
Lender fees and issuance costs incurred with the Notes were $13.4 million and are being amortized as interest expense on an effective interest rate method over the expected life of the Notes, through February 2030, at an effective interest rate of 3.06%.
Holders may convert all or any portion of their Notes at their option at any time prior to the close of business on the business day immediately preceding the maturity date. The Notes have an initial conversion rate of 10.5601 ADSs per $1,000 principal amount of the Notes, which will be subject to anti-dilution adjustments in certain circumstances. This represented an initial conversion price of $94.70 per ADS. The number of shares that would be issuable assuming conversion of all of the Notes is 5,950,600 (assuming the maximum increase to the conversion rate in connection with a “make-whole fundamental change” (as defined in the Indenture)). Upon conversion, the Notes may be settled in shares of the Company’s ordinary shares, cash or a combination of cash and shares of the Company’s ordinary shares, at the Company’s election. Upon the occurrence of a make-whole fundamental change (as defined in the Indenture), the Company may, in certain circumstances, be required to increase the conversion rate by a number of additional shares for a holder that elects to convert its Notes in connection with such make-whole fundamental change.
The Company may not redeem the Notes prior to February 5, 2027, except in the event of certain tax law changes as described below and in the Indenture. The Company may redeem for cash all or any portion of the Notes (subject to the partial redemption limitation described in the Indenture), at its option, on or after February 5, 2027 if the last reported sale price of the ADSs has been at least 130% of the conversion price for the Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of optional redemption, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the optional redemption date.
If, as a result of certain changes in the law of any relevant tax jurisdiction, the Company would be required to pay additional amounts (as defined in the Indenture) on the Notes, the Company may redeem the Notes in whole, but not in part, at a tax redemption price of 100% of the aggregate principal amount thereof, plus accrued and unpaid interest to, but excluding, the tax redemption date and all additional amounts, if any, which otherwise would be payable to the date of tax redemption. Upon the Company giving notice of a tax redemption, a holder may elect not to have its Notes redeemed, in which case the holder would not be entitled to receive any additional amounts with respect to its Notes after the tax redemption date.
If the Company undergoes a fundamental change, holders may require the Company to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
Pharmakon loan
On November 8, 2022, the Company entered into the Pharmakon loan agreement (the "Pharmakon Loan Agreement"), providing for term loans to the Company in an aggregate principal amount of up to $100 million to be funded in two tranches. The first tranche of $50 million bears interest at a fixed rate of 9.75%, which is payable quarterly in arrears, with payments commencing in 2023. The Company was also required to pay a further fee of $1.25 million at the latest by June 2024, regardless of whether it elected to draw down on the second $50 million tranche under the Pharmakon Loan Agreement. The Company elected not to exercise the option to draw down the second tranche and made the payment of $1.25 million in June 2024.
On November 8, 2024, the Company repaid in full the loan outstanding under the Pharmakon Loan Agreement resulting in a loss on extinguishment of $3.9 million. The aggregate cash payment to terminate the Pharmakon Loan Agreement was $52.1 million and consisted of $50.0 million for principal, $0.5 million accrued interest and $1.6 million attributable to a prepayment premium and other expenses payable by the Company pursuant to the Pharmakon Loan Agreement. The contractual maturity date of the loan under the Pharmakon Loan Agreement was November 8, 2028. As of December 31, 2023, the fair value of the loan was $46.1 million. These values were determined based on prevailing interest rates as of the balance sheet dates and are classified as Level 2 within the fair value hierarchy.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Feb 26, 2025 | Showing above |
| 2023 | Feb 28, 2024 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.