Sarepta Therapeutics, Inc. Debt Disclosure

13. INDEBTEDNESS

2027 Convertible Notes, 2030 Convertible Notes and Related Transactions

2027 Notes Issuance and Capped Call Transactions

In September 2022, the Company issued $1,150.0 million aggregate principal amount of convertible senior notes due on September 15, 2027. The 2027 Notes are senior unsecured obligations of the Company and bear interest at a rate of 1.25% per annum, payable semi-annually in cash on each March 15 and September 15, commencing on March 15, 2023. The net proceeds were $1,126.7 million after deducting the discounts and offering expenses of $23.3 million, which is amortized under the effective interest method and recorded as additional interest expense over the life of the 2027 Notes. The effective interest rate on the 2027 Notes is 1.67%. The aggregate issuance of the 2027 Notes includes the issuance of $20.0 million in aggregate principal amount of 2027 Notes to the Michael A. Chambers Living Trust, an entity affiliated with Michael Chambers, a member of the Company’s board of directors.

The conversion rate of the 2027 Notes is 7.0439 shares per $1,000 principal amount of the 2027 Notes, or a conversion price of $141.97 per share. Upon conversion, at its discretion, the Company may pay cash, shares of its common stock or a combination of cash and stock. Prior to March 15, 2027, the holders of the 2027 Notes may convert their 2027 Notes at their option upon achievement of certain market conditions or occurrence of certain corporate events. As of December 31, 2025, no such conditions or events had occurred, and the notes were not eligible for conversion.

Only on or after September 20, 2025, should certain market conditions be met, the Company may redeem for cash all or any portion of the 2027 Notes at a redemption price equal to the principal amount of the 2027 Notes, plus accrued and unpaid interest. Holders of the 2027 Notes have the right to require the Company to repurchase for cash all or a portion of their notes at 100% of its respective principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change as defined in the indenture agreement for the 2027 Notes. The 2027 Notes contain customary covenants and events of default, occurrence of which permits the holders to accelerate all outstanding obligations, including principal and interest.

In connection with the issuance of the 2027 Notes, the Company entered into privately negotiated capped call transactions with counterparties intended to minimize the impact of potential dilution upon conversion of the 2027 Notes (the “2022 Capped Calls”), which covers approximately 8.1 million shares of the Company’s common stock. The 2022 Capped Calls have an initial strike price of approximately $141.97 per share and a cap price of approximately $210.32 per share. If, upon conversion of the 2027 Notes, the price of the Company’s common stock is between the strike price and the cap price of the capped calls, the counterparties will deliver shares of the Company’s common stock and/or cash with an aggregate value equal to the difference between the price of the Company’s common stock at the conversion date and the strike price, multiplied by the number of shares of the Company’s common stock related to the capped calls being exercised. The Company paid $127.3 million for the 2022 Capped Calls.

Exchange of 2027 Notes

On August 28, 2025 (the “First Closing Date”), the Company completed the August 2025 Exchange. The Company exchanged $700.0 million in aggregate principal amount of the 2027 Notes for the following consideration:

The 2030 Notes issued in association with the August 2025 Exchange were issued at a discount of $142.4 million, based on the fair market value of the 2030 Notes on the First Closing Date. The Company incurred debt issuance costs of $13.4 million associated with the August 2025 Exchange.

On December 18, 2025 (the "Second Closing Date"), the Company completed a second partial refinancing of its 2027 Notes (the “December 2025 Exchange”). The Company exchanged $291.4 million in aggregate principal amount of the 2027 Notes for the following consideration:

The 2030 Notes issued in association with the December 2025 Exchange were issued at a discount of $36.4 million, based on the fair market value of the 2030 Notes on the Second Closing Date. The Company incurred debt issuance costs of $4.0 million associated with the December 2025 Exchange.

The December 2025 Exchange included $20.0 million of 2027 Notes held by the Michael A. Chambers Living Trust. The terms of Mr. Chambers' exchange were on the same basis as all other participating holders. The remaining aggregate principal amount of $158.6 million of the 2027 Notes, which are currently convertible into approximately 1.1 million shares of the Company’s common stock, remains outstanding with the respective terms unchanged. Additionally, all capped calls related to the 2027 Notes remain outstanding. The December 2025 Exchange did not result in any material changes to the related party debt arrangements.

2030 Notes Issuance

The 2030 Notes are senior unsecured obligations of the Company and bear interest at a rate of 4.875% per annum, payable semi-annually in cash on each March 1 and September 1, commencing on March 1, 2026.

The 2030 Notes have an initial conversion rate of 16.6667 shares per $1,000 principal amount (approximately 14.9 million shares of the Company’s common stock in the aggregate), which represents a conversion price of $60.00 per share, subject to adjustment under certain conditions. Upon conversion, the Company may pay cash, shares of its common stock or a combination of cash and stock, as determined by the Company at its discretion.

The holders of the 2030 Notes may convert their 2030 Notes at their option only in the following circumstances:

Prior to September 6, 2028, the 2030 Notes will not be redeemable. On or after September 6, 2028, should certain market conditions be met, the Company may redeem for cash all or any portion of the 2030 Notes at a redemption price equal to the principal amount of the 2030 Notes, plus accrued and unpaid interest. Holders of the 2030 Notes have the right to require the Company to repurchase for cash all or a portion of their notes at 100% of its respective principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change as defined in the indenture agreement for the 2030 Notes. The 2030 Notes contain customary covenants and events of default, the occurrence of which permits the holders to accelerate all outstanding obligations, including principal and interest.

The Company concluded that neither the August 2025 Exchange nor December 2025 Exchange (collectively, the “Exchange Transactions”) met the criteria for induced conversion. Further, the Company concluded that the refinanced debt in the August 2025 Exchange as well as approximately $182.8 million of the December 2025 Exchange were substantially different from the original debt and, thus, accounted for as debt extinguishments. The Company also determined that the remaining $108.6 million of the refinanced debt in the December 2025 Exchange was not substantially different from the original debt and, therefore, accounted for as debt modification. The following table summarizes the results of the Exchange Transactions:

Revolving Credit Facility

On February 13, 2025 (the “Revolver Closing Date”), the Company entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”) and as collateral agent and the lenders party thereto. The Credit Agreement provides for a five-year, $600.0 million senior secured revolving credit facility (the “Revolving Credit Facility”). The Company's obligations under the Credit Agreement are secured by substantially all of the Company's assets and the assets of certain wholly-owned material subsidiaries, subject to certain customary exceptions and exclusions.

Interest rates under the Revolving Credit Facility are variable and equal to the Secured Overnight Financing Rate plus a credit spread adjustment of 0.10% per annum (“Adjusted SOFR”), plus a margin of 1.125% to 1.75% per annum, or, at the Company’s option, at a base reference rate equal to the highest of (a) the federal funds rate plus 0.50%, (b) the rate of interest last quoted by the Administrative Agent as its “base rate” and (c) the one-month Adjusted SOFR rate plus 1.00%, plus a margin of 0.125% to 0.75% per annum. The Company also will pay an unused commitment fee ranging from 0.20% to 0.35% per annum on the unused commitments. For the year ended December 31, 2025, the Company incurred $1.8 million in commitment fees related to the unused portion of the Revolving Credit Facility.

The Credit Agreement contains customary representations and warranties, affirmative covenants, negative covenants, conditions and events of default. The Credit Agreement also contains financial covenants that are assessed on the last day of each of the Company’s fiscal quarters, including certain financial ratios such as a maximum secured net leverage ratio and minimum consolidated interest coverage ratio. The Company may voluntarily prepay the outstanding revolving loans under the Revolving Credit Facility in whole or in part without premium or penalty provided that the prepayment shall be in certain amounts as specified therein.

The Company paid $3.2 million in arrangement and up-front fees on the Revolver Closing Date. The arrangement and up-front fees associated with the Revolving Credit Facility are being amortized over the five-year term of the Revolving Credit Facility.

On December 18, 2025, the Company executed the first amendment to its Credit Agreement (the "First Amendment"). The First Amendment primarily updated regulatory representations and reaffirmed the Company’s compliance with existing covenants. No financial terms were amended as a result of the First Amendment. As of December 31, 2025, there were no amounts outstanding under the Revolving Credit Facility and the Company was in compliance with the covenants described above.

2024 Convertible Notes and Related Transactions

Issuance and Capped Call Transactions

In November 2017, the Company issued $570.0 million aggregate principal amount of senior convertible notes due on November 15, 2024 (the "2024 Notes"). The 2024 Notes were senior unsecured obligations of the Company and bore interest at a rate of 1.50% per annum, payable semi-annually in cash on each May 15 and November 15, commencing on May 15, 2018. The net proceeds were $559.4 million after deducting the discounts and offering expenses of $10.6 million. The effective interest rate on the 2024 Notes was 1.9%. The conversion rate of the 2024 Notes was 13.621 shares per $1,000 principal amount, or a conversion price of $73.42 per share, subject to adjustment under certain conditions. In connection with the issuance of the 2024 Notes, the Company entered into privately negotiated capped call transactions with counterparties intended to minimize the impact of potential dilution upon conversion of the 2024 Notes (the “2017 Capped Calls”) which covers approximately 7.8 million shares of the Company’s common stock. The Company paid $50.9 million for the 2017 Capped Calls.

Exchange and Capped Call Settlement

In March 2023, the Company entered into separate, privately negotiated exchange agreements with certain holders of the outstanding 2024 Notes (the “2024 Notes Exchange”), which resulted in an exchange of $313.5 million in aggregate principal value of the 2024 Notes for shares of the Company’s common stock. In connection with the 2024 Notes Exchange, the Company issued approximately 4.5 million shares of the Company's common stock with a fair value of approximately $693.4 million. The Company also incurred approximately $6.9 million in third-party debt conversion costs. The 2024 Notes Exchange was not pursuant to the conversion privileges included in the terms of the debt at issuance and therefore was accounted for as a debt extinguishment and resulted in a loss on debt extinguishment of $387.3 million, inclusive of the $6.9 million in third-party debt conversion costs, which was included in the consolidated statements of comprehensive (loss) income for the year ended December 31, 2023. Corresponding to the 2024 Notes Exchange, the related 2017 Capped Calls were terminated. As a result, the Company received $80.6 million in cash.

Conversion and Capped Call Settlement in 2024

Upon maturity as of November 15, 2024 (“the Maturity Date”), the Company converted the remaining outstanding bonds into approximately 1.2 million shares of its common stock equivalent to an aggregate principal amount of $91.6 million. A de minimis number of bonds were not converted and, as a result, the Company paid less than $0.1 million in cash to those bondholders. As the conversions were completed under the original terms of the 2024 Notes, there is no gain or loss impact on the accompanying consolidated statements of comprehensive (loss) income.

In May 2024, the Company informed remaining holders of the 2024 Notes of its election to settle the 2024 Notes in shares, which, pursuant to the terms of the 2017 Capped Call agreements, would require the Company to settle the 2017 Capped Calls in shares. On September 16, 2024, the Company entered into supplements with each of the counterparties to modify the terms of each of the 2017 Capped Calls to require settlement in cash rather than in shares. As a result of the modification, the Company reclassified the fair value of the 2017 Capped Calls of $43.9 million from stockholders’ equity to derivative assets. As a result of the conversion, the Company ultimately received $45.3 million in cash to settle the remaining 2017 Capped Calls on November 15, 2024. The change in the fair value of the derivative assets from September 16, 2024 to Maturity Date was a gain of $1.5 million and recorded to other (expense) income, net in the consolidated statements of comprehensive (loss) income. There were no derivative assets remaining as of December 31, 2025 or 2024.

Total Debt Obligations

As of December 31, 2025 and 2024, the Company recorded $829.0 million and $1,137.1 million as debt on the consolidated balance sheets, respectively. As of December 31, 2025, all debt was long-term in nature.

For the years ended December 31, 2025, 2024 and 2023, the Company recorded $34.8 million, $20.6 million and $22.0 million of interest expense from outstanding debt facilities, respectively. Interest expense from outstanding debt facilities for the years ended December 31, 2025, 2024 and 2023 is inclusive of $12.1 million, $5.0 million and $5.2 million of amortization of debt discounts, respectively. The fair values of the 2027 Notes and 2030 Notes are based on open market trades and are classified as Level 1 in the fair value hierarchy.