Virgin Galactic Holdings, Inc. filed a current report on Form 8-K on November 13, 2026, disclosing a privately negotiated exchange of approximately $12.5 million in aggregate principal amount of its 2.50% Convertible Senior Notes due 2027 for shares of common stock, along with an amendment to the indenture governing its 9.80% First Lien Notes due 2028.

Key Highlights

  • Note exchange size: The company entered into an agreement to exchange approximately $12.5 million in aggregate principal amount of its 2.50% Convertible Senior Notes due 2027 for newly issued shares of common stock.
  • Reduction in outstanding notes: Following completion of the exchange, the outstanding 2027 Notes will decrease by approximately 69.7%, from $17.9 million to $5.4 million in aggregate principal amount.
  • Original issuance context: The remaining $5.4 million represents approximately 1.3% of the $425.0 million in aggregate principal amount of 2027 Notes originally issued in January 2022.
  • Share pricing mechanism: The number of shares will be determined over a two-day observation period beginning November 17, 2026, using the daily volume-weighted average price, subject to a floor of 85% and a cap of 115% of the closing price on November 16, 2026.
  • Expected closing: The exchange is expected to close on or about November 19, 2026, subject to customary closing conditions.
  • First Lien Notes indenture amendment: The company amended its First Lien Notes indenture to permit certain asset sales without triggering a mandatory redemption requirement, in exchange for agreeing to redeem 80% of net cash proceeds above $5 million from any such sale occurring by July 30, 2027.
  • First Lien Notes balance: The company reported it has previously reduced the outstanding balance of its First Lien Notes from $212.5 million at issuance in December 2025 to $172.0 million.

Virgin Galactic's Debt Restructuring and Indenture Amendment Details

According to the filing, Virgin Galactic Holdings, Inc. (NYSE:SPCE) disclosed on November 13, 2026, that it entered into a privately negotiated exchange agreement with a single holder of its 2.50% Convertible Senior Notes due 2027. The holder agreed to accept shares of the company's common stock in lieu of the cash payment it would otherwise be entitled to receive for principal and accrued interest. The company described this as part of "its previously disclosed comprehensive plan to support its operations and growth initiatives" ahead of the expected commencement of commercial flights in 2027, which also includes improving working capital, investing in a new high-cadence launch hangar, expanding rocket production, and repaying a portion of outstanding indebtedness.

The shares to be issued will be determined through a formula applied over a two-day observation period starting November 17, 2026. One half of the sum of the exchanged principal plus accrued and unpaid interest through February 1, 2027 will be divided by the daily volume-weighted average price for each trading day, the two daily amounts will be added together, and the total will be issued on the closing date. The daily VWAP used in that calculation is capped at no higher than 115% and floored at no lower than 85% of the November 16, 2026 closing price. The filing states the shares will be issued in reliance on the Section 4(a)(2) exemption from Securities Act registration, and only to "qualified institutional buyers" and institutional "accredited investors."

Separately, the filing disclosed an amendment to the indenture governing the company's 9.80% First Lien Notes due 2028, obtained after receiving requisite consent from holders. The amendment permits the company to sell certain assets without triggering the indenture's mandatory use of sale proceeds to redeem those notes. In exchange for that consent, the company agreed to redeem First Lien Notes equal to 80% of net cash proceeds above $5 million from qualifying asset sales occurring by July 30, 2027, at a redemption price of 100% of principal plus accrued interest, payable in cash or up to a maximum of 2,230,425 shares of common stock. The company noted it paid no consent fee to the holders. The filing also states that "there can be no assurance that the Company will sell such assets, or as to the timing or proceeds of any sale."

What Was Disclosed

The filing disclosed an exchange of approximately $12.5 million of 2027 Convertible Notes for common stock, reducing outstanding notes by approximately 69.7%, and an amendment to the First Lien Notes indenture allowing certain asset sales without a mandatory redemption trigger, subject to a partial redemption obligation on proceeds above $5 million.