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NanoString Prices Upsized $200 Million Senior Notes Offering

NEW YORK – NanoString Technologies has priced the private placement of convertible senior notes that it announced preliminarily yesterday.

The firm is offering a $200 million aggregate principal amount of 2.625 percent convertible senior notes to qualified institutional buyers and has granted the initial purchasers of the notes a 13-day option to purchase up to an additional $30 million aggregate principal amount.

The offering of the notes was upsized from the $175 million aggregate principal amount proposed yesterday, and NanoString said the sale of the notes is expected to close on March 9, 2020, subject to customary closing conditions.

The firm now estimates that proceeds will be approximately $193.5 million (or $222.6 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers' discounts and estimated offering expenses.

NanoString said it intends to use approximately $89 million of the total net proceeds to prepay amounts borrowed and fees owed in connection with the termination of its senior term loan facility and for the payment of fees associated with the intended termination of its senior credit facility.

The remainder will go to support general corporate purposes, including the continued development and commercialization of the firm's GeoMx Digital Spatial Profiling system, expansion of its portfolio of nCounter-based products, and for working capital.

According to NanoString, the notes offered will accrue interest payable semiannually in arrears on March 1 and Sept. 1 of each year, beginning on Sept. 1, 2020, at a rate of 2.625 percent per year, and will mature on March 1, 2025, unless earlier converted, repurchased, or redeemed.

The firm said that the initial conversion rate will be approximately 21 shares of NanoString's common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $47.81 per share of common stock). This represents a premium of approximately 40 percent over the last reported sale price of NanoString's common stock on the Nasdaq on March 4, 2020.

Prior to Dec. 1, 2024, the notes will be convertible only upon the satisfaction of specified conditions and during certain periods. After that, until the day before the relevant maturity date, the notes will be convertible at the option of the noteholders into cash, shares of NanoString's common stock, or a combination of cash and shares, at the company's election.

Other conditions of the offering include that NanoString may redeem the notes on or after March 5, 2023, if the last reported sale price of its common stock has been at least 130 percent of the conversion price for at least 20 trading days during any 30 consecutive trading day period.

In certain events, holders of the notes may also require NanoString to repurchase for cash all or any portion of their notes at a repurchase price equal to 100 percent of the principal amount of the notes to be repurchased, plus accrued and unpaid interest. In addition, following certain corporate events or if NanoString issues a notice of redemption, NanoString will, under certain circumstances, increase the conversion rate for holders who convert their notes in connection with such corporate event or notice of redemption.

In Thursday morning trade on the Nasdaq, shares of NanoString were up around 0.32 percent at $34.26.