Ann: MSB Enters Into $75 Million Non-Dilutive Credit Facility, page-117

Also they are paying 9.45% interest rate. Had there been any form of convertible equity instrument as you suggest then interest arte would have been a bit lower I would imagine.


@nikki ,

The devil, they say, is in the detail.

So, check out Slide 22 (headed "EFFECTIVE YIELD VS. CORE YIELD – LEADS TO STRONG EARNINGS") of Hercules Capital's most recent presentation:

http://investor.htgc.com/Cache/1001232545.PDF?O=PDF&T=&Y=&D=&FID=1001232545&iid=4102290


You'll see that the average yield on company's debt portfolio - which they tell us is secured - is currently 9.8% (Loan Coupon Rate), which is a touch higher than the loan being extended to Mesoblast (viz. 9.45%).

Now why would Hercules Capital offer MSB a loan, on an unsecured basis, but charge MSB a lower rate than it charges its average customer for loans that are secured?


PS. Oh, incidentally, it is worthwhile to have a look at the line on the chart labelled "GAAP Effective Yield", which per the accompanying footnote, is the rate that Hercules Capital actually ends up getting, inclusive of all fees. It is a cool 450bp to 500bp higher than the coupon rate which is quoted. Based on that, I somehow suspect this money is going to have an all-in cost a darn sight higher than the 9.45% rate mentioned in yesterday's announcement.