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Illumina Prices $1B of Convertible Senior Notes

NEW YORK (GenomeWeb) – Illumina today priced its $1 billion convertible senior notes offering, which it expects will bring in net proceeds of approximately $985 million.

The $1 billion in senior notes is above the $900 million that the firm proposed on Wednesday when it initially announced the offering.

Illumina said that it is offering $550 million of its 0 percent convertible senior notes due 2019 and $450 million of its .5 percent convertible senior notes due 2021. The notes are being offered to qualified institutional buyers, and Illumina has granted the initial purchasers — Goldman Sachs and BofA Merill Lynch — an option to buy up to an additional $82.5 million of the 2019 notes and $67.5 million of the 2021 notes.

The 2019 notes will not bear interest and will mature on June 15, 2019. The 2021 notes will be paid semi-annually at a rate of .5 percent per year and will mature on June 15, 2021.

The initial conversion rate of both the 2019 and 2021 notes is 3.9318 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of around $254.34 per share of common stock. That conversion rate is subject to adjustment in certain circumstances, said Illumina. The initial conversion price represents a premium of 55 percent over the Thursday closing price of $164.09 for Illumina's common stock.

Illumina intends to use the proceeds to help fund repurchases of up to $600 million of its outstanding .25 percent convertible senior notes due 2016 through privately negotiated transactions.

The firm expects to close the offering on June 11.

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