LivePerson Announces Debt Exchange, Reduces Debt by $226M

LivePerson has announced a $341.1 million debt exchange, reducing its debt by $226 million. The transaction includes $45 million in cash, $115 million in new secured notes with a 10% interest rate, and an equity component representing 39% shareholder dilution. The deal extends the company's financial viability to 2029 and captures a $181 million debt discount for shareholders.

LivePerson, Inc. (NASDAQ: LPSN), a leading provider of enterprise conversational AI and digital transformation solutions, has announced a significant debt exchange that will reduce its debt by $226 million. The transaction involves exchanging $341.1 million of its outstanding 2026 Convertible Senior Notes for a mix of consideration, including $45.0 million in cash, $115.0 million in 2029 Senior Subordinated Secured Notes, and an equity component representing 39.0% of the company's fully diluted common stock outstanding following the exchange [1].

The exchange, which is expected to close by the end of September, is part of LivePerson's multi-year strategy to deleverage its balance sheet. The company expects the deal to capture a $181 million debt discount, accrue to shareholders, and extend the company's financial runway through 2029 [1]. The new secured notes will be guaranteed by certain of LivePerson's subsidiaries and secured by a second-priority lien on substantially all of its assets, accruing interest at a rate of 10.0% per annum [1].

The equity component of the exchange includes shares of Series B Fixed Rate Convertible Perpetual Preferred Stock and shares of common stock. The shares of Series B Preferred Stock will be convertible into a fixed number of shares of common stock, contingent on the approval of a charter amendment to increase the company's authorized share capital [1]. If shareholders approve the amendment, the Series B Preferred Stock will be converted into common stock, with regular dividends accruing at a rate of 15.0% and potentially increasing to 20.0% after one year [1].

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, and the common equity shares will be filed in a Current Report on Form 8-K with the Securities and Exchange Commission [1].

References:
[1] https://ir.liveperson.com/news-releases/news-release-details/liveperson-announces-deleveraging-transaction