SAN FRANCISCO - iRhythm Technologies, Inc. (NASDAQ:IRTC), a digital health care company, has announced its intention to offer $450 million in Convertible Senior Notes due 2029 in a private placement to qualified institutional buyers. This offering, subject to market and other conditions, will also grant initial purchasers an option to buy an additional $67.5 million in notes within 13 days of issuance.
The notes, which are senior unsecured obligations, will pay interest semi-annually and mature on September 1, 2029, unless they are converted, repurchased, or redeemed beforehand. Conversion of the notes is subject to certain conditions and periods before June 1, 2029, after which they can be converted anytime until two days before maturity.
iRhythm has stated that the notes will not be redeemable before March 5, 2027. However, from then until June 1, 2029, the company may choose to redeem the notes in cash if their common stock's sale price meets specific conditions. In the event of a fundamental change, as defined in the notes' indenture, holders have the right to demand iRhythm repurchase their notes at full principal value plus any unpaid interest.
The interest rate, initial conversion rate, and other terms will be determined at the pricing of the notes. Braidwell LP, a lender and stockholder of iRhythm, has indicated an interest in purchasing a portion of the notes, although this is not guaranteed.
iRhythm plans to use the net proceeds to repay part of its debt to Braidwell, fund capped call transactions, and for general corporate purposes, which may include future acquisitions, although there are no specific commitments at this time.
In connection with the notes' pricing, iRhythm is looking to enter capped call transactions to potentially reduce stock dilution upon conversion of the notes or to offset cash payments required for converted notes. The capped call counterparties may engage in derivative transactions that could affect iRhythm's common stock's market price.
The information in this article is based on a press release statement.
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