NEW YORK (GenomeWeb News) – Illumina today priced an offering of $800 million in convertible senior notes due 2016.
The notes will pay interest semi-annually at a rate of .25 percent. They are convertible upon certain conditions, and upon conversion, holders will receive cash, shares of the firm's common stock, or a combination of both, based on an initial conversion rate of 11.9687 shares of common stock per $1,000 principal amount of the notes — equal to an initial conversion price of roughly $83.55 per share.
The San Diego-based firm also has granted initial purchasers a 30-day option to purchase up to $120 million of additional notes.
Up to $425 million in net proceeds from the offering will be used by the company to buy back shares of its common stock in privately negotiated deals concurrent with the offering. Between $260 million and $390 million of net proceeds are being targeted to fund conversions of its currently outstanding convertible notes, Illumina said. The remainder of the funds will be used for general corporate purposes, which may include acquisitions and additional share buybacks.
Illumina expects to close the offering on Friday.