iRhythm
(Nasdaq: IRTC)
announced today that it intends to offer $450 million in convertible senior notes.
San Francisco-based iRhythm plans to offer the notes — due 2029 — to qualified institutional buyers. It intends to grant initial purchasers a 13-day option to buy up to an additional $67.5 million in notes. The notes will be senior, unsecured obligations of iRhythm, with interest payable semi-annually in arrears. The notes mature on Sept. 1, 2029.
iRhythm may redeem for cash all or part of the notes, at its option, if its reported sale price totals at least 130% of the conversion price for at least 20 trading days during any consecutive 30-day trading period. Holders can require iRhythm to repurchase for cash all or a potion of the notes at 100% of their principal amount, plus interest. The company determines the interest rate, conversion rate, offering price and other terms upon the pricing of the notes.
According to a news release, Braidwell LP, the company’s lender and a common stockholder, expressed interest in buying notes.
iRhythm plans to use proceeds to pay the cost of capped call transactions in connection with the offering. The company plans to use approximately $80.1 million of the proceeds to repay in full its outstanding indebtedness with Braidwell. It also expects to use up to $25 million of the proceeds to repurchase shares of its own common stock. The wearable heart monitor maker earmarked the remainder of the proceeds for general corporate purposes.