HALO - Halozyme launches offering of $500M convertible senior notes

Halozyme Therapeutics ( NASDAQ: HALO ) has announced a proposed offering of $500M of convertible senior notes due 2028.

The notes are to be offered and sold to "qualified institutional buyers." They will accrue interest payable semi-annually in arrears and will mature on August 15, 2028, unless earlier redeemed, repurchased or converted.

Initial purchasers will be granted a 13-day option to purchase up to an additional $75M of the convertible notes.

In connection with the offering, the company intends to enter into privately negotiated capped call transactions with option counterparties that may include one or more of the initial purchasers and/or their affiliates and/or other institutions. These transactions are generally expected to reduce potential dilution to the company's common stock upon conversion of the convertible notes and/or offset any cash payments the company is required to make in excess of the principal amount of converted notes, as the case may be.

Halozyme ( HALO ) plans to use a portion of net proceeds of the offering to fund the cost of entering into the capped call transactions, to repurchase shares of its common stock up to $200M and repay all of its outstanding $250M term loan facility due 2026. The remainder of the net proceeds will be used for general corporate purposes.

The share repurchases, if consummated in full, would represent an increase of $100M of the previously planned share repurchases to be made in 2022 under the company's ongoing three-year $750M share repurchase program.

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