Tandem Diabetes greenshoe lifts 1.5% convertibles to $287.5 million

By Sarah Lizee

Olympia, Wash., May 15 – Initial purchasers for Tandem Diabetes Care Inc.’s five-year convertible notes fully exercised the $37.5 million greenshoe, bringing the total deal size to $287.5 million, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, the company priced $250 million of the convertibles after the market close on Tuesday at par at the cheap end of talk with a coupon of 1.5% and an initial conversion premium of 30%, according to a company news release.

Price talk was for a coupon of 1% to 1.5% and an initial conversion premium of 30% to 35%, according to a market source.

Goldman Sachs & Co. LLC (lead left) and Barclays are active bookrunners on the Rule 144A offering.

The notes are non-callable until May 6, 2023 and then subject to a 130% hurdle above the conversion price.

They are contingently convertible until Nov. 1, 2024.

The notes are putable upon a fundamental change. There is dividend protection.

In connection with the pricing of the notes, the company entered into capped call transactions with a cap price of $173.18, which represents a premium of 100% over the last reported sales price of stock.

Net proceeds are expected to be $278.9 million with the greenshoe exercised in full.

About $29.6 million of the net proceeds will be used to cover the cost of the call spread with the remaining amount to be used for general corporate purposes.

Tandem Diabetes is a San Diego-based medical device company.

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