By Angela McDaniels
Tacoma, Wash., April 30 - Hologic, Inc. issued $500 million of new 2% convertible senior notes due 2042 in exchange for $500 million principal amount of its outstanding 2% convertible senior notes due 2037 during the fiscal second quarter ended March 24, according to the company's earnings release.
The exchanges were made under separate, privately negotiated exchange agreement reached on Feb. 29.
Through the exchanges, the company extended the holders' first put date by about four years to March 2018 from December 2013. In return, the holders received a lower conversion price.
Following the transactions, about $775 million principal amount of the old convertibles remain outstanding, and the company has a total of $1.73 billion of convertible senior notes outstanding.
According to an 8-K filing with the Securities and Exchange Commission dated Feb. 28, the coupon for the new convertibles will be 2% until March 1, 2018, after which the principal will accrete at a rate of 2% per year.
Beginning March 1, 2018, the new convertibles will pay additional contingent interest if their average trading price meets or exceeds 120% of their accreted principal amount for the five trading days ending on the second trading day immediately preceding the relevant six-month interest period. The contingent interest amount will be 0.4% of the average trading price of one convertible for that five-day period.
The initial conversion rate is 32.07698 shares per $1,000 original principal amount of notes, which is a conversion price of about $31.175 per share. The initial conversion price is a 45% premium over the closing sale price of Hologic's common stock on Feb. 28.
The company can settle conversions in cash, stock or a combination.
The new convertibles have a make-whole interest provision that may increase the conversion rate if certain fundamental changes occur prior to March 1, 2018.
The notes are convertible at any time beginning Dec. 1, 2041. Prior to that, they are convertible only under the following circumstances:
• During any calendar quarter after June 30 if the last reported trading price of the company's common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the previous calendar quarter is 130% or more of the conversion price;
• Subject to some exceptions, during the five business days after any five consecutive trading days in which the trading price of the news convertibles was less than 98% of the product of the last reported trading price of the company's common stock multiplied by the conversion rate;
• If the new convertibles have been called for redemption; or
• Upon the occurrence of specified corporate transactions.
The new convertibles are callable beginning March 6, 2018. They are putable on March 1, 2018, March 1, 2022, March 1, 2027, March 1, 2032 and March 2, 2037 or upon a fundamental change. The redemption or repurchase price will be equal to the accreted principal amount of the convertibles plus accrued interest.
Hologic is based in Bedford, Mass., and makes diagnostics products, medical imaging systems and surgical products designed to meet the health-care needs of women.
| Issuer: | Hologic, Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $500 million
|
| Maturity: | March 1, 2042
|
| Coupon: | 2%, payable in cash until March 1, 2018 and then in kind
|
| Price: | Par
|
| Conversion price: | $31.175
|
| Conversion premium: | 45%
|
| Conversion rate: | 32.07698 shares per note
|
| Call option: | Beginning March 6, 2018
|
| Put option: | On March 1, 2018, March 1, 2022, March 1, 2027, March 1, 2032 and March 2, 2037 or upon a fundamental change
|
| Stock symbol: | Nasdaq: HOLX
|
| Stock price: | $21.23 at close April 27
|
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