LivePerson Announces Deleveraging Transaction, Exchanges $341.1mln Notes for $45mln Cash, $115mln Notes.

LivePerson, a leading provider of conversational AI, has announced a deleveraging transaction with holders of $341.1 million of its 2026 Convertible Senior Notes. The agreement exchanges the notes for a mix of $45.0 million in cash, $115.0 million of 2029 Senior Subordinated Secured Notes, and common and preferred equity. This deal aims to reduce the company's debt and improve its financial position.

LivePerson, Inc. (NASDAQ: LPSN), a leading provider of conversational AI, has announced a significant deleveraging transaction with holders of $341.1 million of its 2026 Convertible Senior Notes. The agreement, announced on August 11, 2025, involves exchanging these notes for a mix of $45.0 million in cash, $115.0 million of 2029 Senior Subordinated Secured Notes, and common and preferred equity. This move aims to reduce the company's debt and enhance its financial position.

According to the press release, the transaction will capture $181 million of debt discount, which will accrue to shareholders. The company's balance sheet will be deleveraged by $226 million, and the company's runway will be extended through 2029. The deal is expected to shift a greater proportion of enterprise value to shareholders, providing the company with more time to execute its strategy and enhance value for shareholders.

The exchange is subject to customary closing conditions and is expected to occur by the end of September. The new secured notes will be guaranteed by certain of the Company's subsidiaries and secured by a second-priority lien on substantially all assets of the Company and the guarantors, accruing interest at a rate of 10.0% per annum. The new secured notes will mature on December 15, 2029.

The shares of Series B Preferred Stock will be convertible into a fixed number of shares of common stock, depending on the number of shares required to provide the Aggregate Equity Amount and the number of shares of Common Equity Shares issued as of the closing of the Exchange. If shareholders approve an amendment to the Company's charter to increase its authorized share capital, the Series B Preferred Stock will be convertible. Regular dividends on each share of Series B Preferred Stock will accrue at a rate of 15.0% and will be paid in cash or in-kind. If any shares of Series B Preferred Stock remain outstanding on the first anniversary of the Closing Date, the regular dividend rate will increase to 20.0%.

John Collins, CFO and COO of LivePerson, stated, "Today's transaction represents the successful culmination of our multi-year strategy to deleverage the balance sheet. This exchange captures $181 million of debt discount that accretes to shareholders, deleverages the balance sheet by $226 million, and extends LivePerson's runway through 2029."

LivePerson's executive officers are supportive of the transaction and intend to vote their shares in favor of the proposed charter amendment. Additional details regarding the Exchange, the New Secured Notes, the Series B Preferred Stock, the Common Equity Shares, and other related information will be filed with the Securities and Exchange Commission in a Current Report on Form 8-K.

References:
[1] https://www.prnewswire.com/news-releases/liveperson-announces-deleveraging-transaction-302526834.html
[2] https://www.marketscreener.com/news/liveperson-announces-deleveraging-transaction-ce7c5ed3d888f62c