ALNY - Alnylam Pharmaceuticals slides on offering of $900M convertible senior notes

Alnylam Pharmaceuticals ( NASDAQ: ALNY ) shares dropped over 5% on Monday after the RNAi therapeutics company proposed an offering of $900M convertible senior notes due 2027.

The notes will accrue interest payable semi-annually in arrears and will mature on Sep 15, 2027, unless earlier converted, redeemed or repurchased. The interest rate, initial conversion rate and other terms of the notes will be determined at the pricing of the offering.

Initial purchasers of the notes will be granted an option to purchase, for settlement within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $135M aggregate principal amount of the notes.

Alnylam will settle conversions by paying or delivering, as applicable, cash, shares of its common stock, or a combination of cash and shares of its common stock.

The notes will be redeemable, in whole or in part, for cash at Alnylam’s option at any time, and from time to time, on or after Sep 20, 2025 and on or before the 21st scheduled trading day immediately preceding the maturity date, if the last reported sale price per share of Alnylam’s common stock exceeds 130% of the conversion price for a specified period of time.

The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Alnylam expects to enter into privately negotiated capped call transactions in connection with the pricing of the notes.

A portion of the net proceeds from the offering to pay the cost of the capped call transactions. In addition, the company plans to use ~$762M of the net proceeds to repay borrowings and accrued and unpaid interest and to pay the prepayment premium under and terminate its current credit agreement. Any remaining proceeds will be used for general corporate purposes.

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