SAN DIEGO - Tandem Diabetes Care, Inc. (NASDAQ: NASDAQ:TNDM), a company specializing in insulin delivery and diabetes technology, has announced its intention to offer $250 million in Convertible Senior Notes due 2029 in a private placement to qualified institutional buyers.
The company also plans to provide an option to purchase an additional $37.5 million in notes within a 13-day period starting from the issuance date.
The notes will be unsecured and will accrue interest payable semiannually. Upon conversion, Tandem may pay or deliver cash, shares of its common stock, or a combination thereof. The interest rate and initial conversion rate will be determined during the pricing of the offering.
Tandem aims to use the net proceeds alongside existing cash to finance capped call transactions, repurchase certain 1.50% Convertible Senior Notes due 2025, and buy back up to $30 million of its common stock in private transactions.
If the option to purchase additional notes is exercised, the company will use the proceeds for additional capped call transactions and general corporate purposes, which may include further repurchases of the 2025 notes or repayment at maturity.
In conjunction with the note pricing, Tandem anticipates entering into capped call transactions to reduce potential dilution from the conversion of the notes. The option counterparties or their affiliates may engage in derivative transactions and purchase Tandem's common stock, which could affect its market price.
Furthermore, Tandem may negotiate privately with certain 2025 note holders to repurchase their notes. The repurchase is not guaranteed and is not a condition for the offering of the new notes. The repurchase activity, along with the unwinding of hedge positions by the note holders, may impact the market price of Tandem's common stock.
The company also intends to terminate a portion of existing capped call transactions corresponding to the amount of 2025 notes repurchased. This activity may also influence the market price of Tandem's common stock and the value of the notes.
The notes and any shares of common stock issued upon conversion will not be registered under the Securities Act and cannot be offered or sold in the U.S. without registration or an exemption.
This offering is based on a press release statement and is not an offer to sell or a solicitation of an offer to buy any securities.
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