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Virgin Galactic (NYSE: SPCE) cuts 2027 convertible notes balance by 75%

Filing Impact
(Moderate)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Virgin Galactic Holdings, Inc. entered a privately negotiated agreement to exchange approximately $52.5 million of its 2.50% Convertible Senior Notes due 2027 for common stock and pre-funded warrants. This is intended to improve liquidity, manage cash, and strengthen the balance sheet ahead of planned commercial operations in the fourth quarter of 2026.

After the exchange, the outstanding principal on the 2027 notes will drop by about 75%, from $70.4 million to $17.9 million. The number of shares and pre-funded warrants issued will be based on the five-day volume-weighted average price of the stock from June 22, 2026, with a price floor of $3.03 and a cap of $4.09. The securities will be issued in a private placement to qualified institutional buyers and institutional accredited investors under an exemption from Securities Act registration.

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Insights

Virgin Galactic is exchanging $52.5M of 2027 convertible notes for equity-linked securities, cutting this debt by 75%.

The company will swap approximately $52.5 million of 2.50% Convertible Senior Notes due 2027 for common stock and pre-funded warrants. This reduces outstanding principal from $70.4 million to $17.9 million, lowering future interest obligations and shifting part of the capital structure from debt to equity-like instruments.

The share and warrant count will be set using a five-day volume-weighted average price between $3.03 and $4.09 starting June 22, 2026. Actual dilution will depend on the final VWAP within this range. The transaction targets improved liquidity as the company prepares for planned commercial operations in the fourth quarter of 2026.

Item 3.02 Unregistered Sales of Equity Securities Securities
The company sold equity securities in a private placement or other unregistered transaction.
Notes exchanged $52.5 million aggregate principal 2.50% Convertible Senior Notes due 2027
Notes outstanding before $70.4 million Aggregate principal of 2027 notes pre-exchange
Notes outstanding after $17.9 million Aggregate principal of 2027 notes post-exchange
Coupon rate 2.50% Convertible Senior Notes due 2027
VWAP floor $3.03 per share Lower bound for Daily VWAP in share calculation
VWAP cap $4.09 per share Upper bound for Daily VWAP in share calculation
Warrant exercise price $0.0001 per share Nominal exercise price of pre-funded warrants
Observation period length 5 trading days Beginning June 22, 2026, to set VWAP-based issuance
Convertible Senior Notes financial
"a holder of its 2.50% Convertible Senior Notes due 2027 (the “2027 Notes”)"
Convertible senior notes are a type of loan that a company issues to investors, which can be turned into company shares later on. They are called "senior" because they are paid back before other debts if the company runs into trouble. This allows investors to earn interest like a loan but also have the chance to own part of the company if its value rises.
pre-funded warrants financial
"the Company will issue shares of the Company’s common stock/pre-funded warrants (collectively, the “Shares”)"
Pre-funded warrants are financial instruments that give investors the right to purchase a company's stock at a set price, but with most or all of the purchase price paid upfront. They function like a coupon or gift card for stock, allowing investors to buy shares later at a fixed price, which can be beneficial if they want to avoid future price increases. This makes them important for investors seeking flexibility and certainty in their investment plans.
volume-weighted average price financial
"divided by the daily volume-weighted average price of the common stock (the “Daily VWAP”)"
Volume-weighted average price (VWAP) is the average price of a stock over a specific time period where each trade is weighted by the number of shares traded, so larger trades influence the average more than small ones. Investors and traders use VWAP as a reference point to judge whether trades are happening at relatively good or poor prices—like checking the average price paid for an item at a market where bulk purchases count more than single-item buys.
qualified institutional buyers regulatory
"only to investors that qualify as “qualified institutional buyers” (as such term is defined in Rule 144A of the Securities Act)"
Qualified institutional buyers are large organizations, like big investment firms or banks, that are allowed to buy certain types of investment opportunities not available to everyday investors. Their size and experience matter because it ensures they understand and can handle complex financial deals, making markets more efficient and secure.
accredited investors regulatory
"institutional “accredited investors” (as such term is defined in Rule 501 of Regulation D under the Securities Act)"
Accredited investors are individuals or entities considered to have enough financial knowledge and resources to understand and handle more complex and risky investments. They are often allowed to participate in private investment opportunities that are not available to the general public, similar to how experienced players might access exclusive clubs or events. This status helps ensure that investors can manage potential risks and rewards appropriately.
Section 4(a)(2) of the Securities Act regulatory
"in reliance on the exemption from the registration requirements ... provided by Section 4(a)(2) of the Securities Act"
A legal exemption that allows a company to sell securities directly to a limited group of buyers without registering the offering with the Securities and Exchange Commission. Think of it like a private sale among known parties rather than a public auction: it can speed fundraising and reduce disclosure requirements, but it also means less public information, lower liquidity and resale restrictions—factors investors should consider when weighing risk and exit options.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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FAQ

What did Virgin Galactic (SPCE) announce regarding its 2027 convertible notes?
Virgin Galactic agreed to exchange approximately $52.5 million of its 2.50% Convertible Senior Notes due 2027 for common stock and pre-funded warrants, aiming to improve liquidity, manage cash, and strengthen its balance sheet ahead of planned commercial operations in late 2026.

How much will Virgin Galactic’s 2027 notes outstanding be after the exchange?
After completing the exchange, Virgin Galactic’s 2.50% Convertible Senior Notes due 2027 will decline from $70.4 million in aggregate principal to $17.9 million, representing roughly a 75% reduction in this debt balance for the company.

How will the number of Virgin Galactic shares and warrants issued be determined?
The total shares and pre-funded warrants issued will be based on the five-day volume-weighted average price of Virgin Galactic’s common stock, measured from June 22, 2026, with a VWAP floor of $3.03 and a cap of $4.09 applied to each observation day.

Who is eligible to receive the new Virgin Galactic shares and pre-funded warrants?
The new common shares and pre-funded warrants will be issued in a private placement only to investors qualifying as qualified institutional buyers under Rule 144A and institutional accredited investors under Regulation D, relying on Section 4(a)(2) of the Securities Act.

When is Virgin Galactic’s convertible note exchange expected to close?
The exchange is expected to close on or about June 29, 2026, subject to customary closing conditions. On that closing date, Virgin Galactic will issue the calculated number of common shares and pre-funded warrants to the participating noteholder in full satisfaction of the exchanged principal and interest.

Why is Virgin Galactic conducting this convertible note exchange now?
Virgin Galactic states the exchange is intended to improve liquidity, manage its cash position, and strengthen its balance sheet as it prepares for the start of commercial operations, which the company plans to begin in the fourth quarter of 2026, subject to execution and risk factors.
Virgin Galactic Holdings, Inc false 0001706946 0001706946 2026-06-22 2026-06-22
 
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 22, 2026

 

 

Virgin Galactic Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-38202   85-3608069

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

 

1700 Flight Way

Tustin, California

   92782
(Address of principal executive offices)   (Zip Code)

(949) 774-7640

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

  

Trading

Symbol(s)

  

Name of each exchange

on which registered

Common stock, $0.0001 par value per share   SPCE   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 
 

Item 3.02.

Unregistered Sales of Equity Securities.

On June 22, 2026, Virgin Galactic Holdings, Inc. (the “Company”) entered into a privately negotiated exchange agreement with a holder of its 2.50% Convertible Senior Notes due 2027 (the “2027 Notes”) to exchange (the “Exchange”) approximately $52.5 million in aggregate principal amount of 2027 Notes held by such holder for the Shares (as defined below).

The Company entered into the Exchange to improve liquidity, manage its cash position and strengthen its balance sheet as it prepares for commercial operation in the fourth quarter of 2026. The holder of the 2027 Notes has agreed to accept the Shares in lieu of the cash payment obligation that they otherwise would be entitled to receive for the principal and interest under the 2027 Notes. Following the completion of the Exchange, the Company will reduce the outstanding 2027 Notes by approximately 75%, from $70.4 million to $17.9 million in aggregate principal amount outstanding.

The Exchange is expected to close on or about June 29, 2026 (the “Closing Date”), subject to the satisfaction of customary closing conditions. On the Closing Date, the Company will issue shares of the Company’s common stock/pre-funded warrants (collectively, the “Shares”), which will be determined over a five-day observation period beginning on June 22, 2026. One fifth (1/5th) of the aggregate principal amount of the 2027 Notes to be exchanged (including accrued and unpaid interest) will be divided by the daily volume-weighted average price of the common stock (the “Daily VWAP”) for each respective trading day during the observation period. The five daily amounts will then be added together, and the resulting total number of Shares will be issued to the holder on the Closing Date. The pre-funded warrants, which have a nominal exercise price of $0.0001 per share, are being issued in lieu of shares of the Company’s common stock in the Exchange solely for the holder to manage its beneficial ownership, and are intended to be economically equivalent to the shares of common stock.

The Daily VWAP will be subject to a floor of no lower than $3.03 and a cap of no higher than $4.09. The Daily VWAP will solely be used to determine the total number of Shares to be issued to the holder and will not impact the principal amount of the 2027 Notes being exchanged.

The issuance of the Shares by the Company is being made in reliance on the exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), provided by Section 4(a)(2) of the Securities Act. The Shares will be issued only to investors that qualify as “qualified institutional buyers” (as such term is defined in Rule 144A of the Securities Act) and institutional “accredited investors” (as such term is defined in Rule 501 of Regulation D under the Securities Act). The Shares have not been registered under the Securities Act or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and such other jurisdictions.

***

Forward Looking Statements

This Current Report on Form 8-K contains forward-looking statements, including, without limitation, statements relating to the completion of the Exchange and the timing of commercial operations. These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties. For a more complete discussion of these risk factors, see the Company’s filings with the Securities and Exchange Commission, including the Company’s most recent annual report on Form 10-K. If one or more of these risks or other risks materialize, actual results may vary materially from those expressed. The Company cautions readers not to place undue reliance on these forward-looking statements, which speak only as of the date of this report, and the Company undertake no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    VIRGIN GALACTIC HOLDINGS, INC.
Date: June 22, 2026     By:  

/s/ Douglas Ahrens

    Name:   Douglas Ahrens
    Title:   Chief Financial Officer and Treasurer

Source: View Original Filing on SEC EDGAR

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