(Source: PRNewswire)CAMBRIDGE, Mass., Aug. 28 /PRNewswire-FirstCall/ -- Verenium Corporation (Nasdaq: VRNM) announced today that it has entered into privately negotiated exchange agreements with certain existing holders of its 5.5% Convertible Senior Notes due 2027 (the "5.5% Notes"). Pursuant to the agreements, existing holders of the 5.5% Notes have agreed to exchange approximately $28.5 million in aggregate principal of the 5.5% Notes, for approximately $12.8 million of 9% Convertible Senior Secured Notes due 2027 (the "New Notes"). Lazard Middle Market LLC acted as a financial advisor to the Company for this transaction.

Additional terms relating to the exchange of the original 5.5% Notes and the New Notes include:

-- An exchange ratio of 45%, meaning that for each $1,000 of original 5.5%

Notes exchanged, the holder will receive $450 of New Notes;

-- The right to convert the New Notes into common stock of the Company at a

conversion price of $.80 per share;

-- An interest rate of 9% per annum, payable in cash or common stock at the

Company's discretion;

-- A security interest in certain assets of the Company as collateral for

the New Notes, which security interest will be pari passu with a

security interest being provided by the Company in the same collateral

to holders of the Company's amended and restated 8% Convertible

Senior Notes due 2012; and

-- The New Notes permit the Company to incur unlimited additional debt,

secured or unsecured, with up to $50 million of secured debt having

priority in the collateral of the New Notes.

"Through this exchange we reduce our debt and create additional financial flexibility, which are critical as we continue to build a leading next-generation biofuels and specialty enzymes business," said Carlos A. Riva, President and Chief Executive Officer at Verenium.

"We are pleased to have taken this opportunity to further strengthen our balance sheet and create a more appropriate capital structure to support the Company's future growth and continued success," said James E. Levine, Chief Financial Officer at Verenium. "Reducing the face amount of the New Notes by 55% compared to the 5.5% Notes being exchanged, and creating the potential for further debt reduction through future conversions of the New Notes into equity at a premium to the current stock price, is an important step forward for Verenium."

The material terms of the exchange and the New Notes will be described in more detail in the Company's Current Report on Form 8- K, to be filed with the Securities and Exchange Commission as soon as practicable following finalization of the associated transaction documentation.