Tandem Diabetes talks $250 million five-year convertibles to yield 1.25%-1.75%, up 25%-30%

By Abigail W. Adams

Portland, Me., March 4 – Tandem Diabetes Care Inc. plans to price $250 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 1.25% to 1.75% and an initial conversion premium of 25% to 30%, according to a market source.

Goldman Sachs & Co. LLC (lead left) and Barclays are bookrunners for the Rule 144A offering, which carries a greenshoe of $37.5 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

The notes will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company will enter into capped call transactions.

The company will repurchase for cash a portion of its 1.5% convertible notes due 2025 in privately negotiated transactions.

Proceeds will be used to fund the cost of the call spread, to fund the repurchase of the 1.5% convertible notes due 2025 and to repurchase up to $30 million of stock in privately negotiated transactions.

Remaining proceeds will be used for general corporate purposes, which may include additional repurchases of the 2025 notes or repayment of the 2025 notes upon maturity.

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

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