Halozyme proposes $1.05 billion convertible notes offering

Halozyme Therapeutics, Inc. (Nasdaq: HALO) announced a proposed offering of $1.05 billion in aggregate principal amount of convertible senior notes due 2033, according to a company press release.

The San Diego-based biopharmaceutical company also expects to grant initial purchasers a 13-day option to buy up to an additional $150 million in aggregate principal amount of the notes. The offering is limited to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

The notes will be senior, unsecured obligations maturing on October 1, 2033, with interest paid semi-annually. The initial conversion rate, interest rate, and other terms will be set at pricing. Halozyme may settle conversions in cash, shares of common stock, or a combination, at its election.

In connection with the offering, Halozyme intends to enter into capped call transactions with one or more financial institutions to reduce potential dilution to its common stock upon conversion of the notes.

The company plans to use a portion of the net proceeds to fund the capped call transactions and to repurchase, through privately negotiated transactions, portions of its outstanding 0.25% convertible senior notes due 2027 and 1.00% convertible senior notes due 2028. The remainder of the proceeds are earmarked for general corporate purposes, including working capital, capital expenditures, and potential acquisitions.

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