Insulet to price $250 million five-year convertible notes to yield 1.25%-1.75%, up 27.5%-32.5%

By Rebecca Melvin

New York, Sept. 6 – Insulet Corp. launched an offering of $250 million of five-year convertible notes after the market close on Tuesday that was seen pricing after the market close on Wednesday. The offering was talked to yield 1.25% to 1.75% with an initial conversion premium of 27.5% to 32.5%, according to market sources.

The Rule 144A deal has a $37.5 million greenshoe and was being sold via joint bookrunners Morgan Stanley & Co. LLC and Wells Fargo Securities LLC.

The notes are non-callable for three years and then are provisionally callable if the company’s shares exceed 130% of the conversion price. They are freely callable after that.

The notes also have contingent conversion at the 130% share price threshold and net share settlement.

There is dividend protection for any dividends paid and takeover protection via a standard make-whole matrix.

Proceeds will be used for general corporate purposes, including the possible repurchase, redemption and/or settlement of conversions of Insulet's existing 2% convertibles due 2019.

Insulet is a Bedford, Mass.-based medical device maker.

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