Jazz Pharmaceuticals (JAZZ) Prices $850M Notes Offering

Jazz Pharmaceuticals plc (Nasdaq: JAZZ) ("Jazz Pharmaceuticals") today announced the pricing of $850 million aggregate principal amount of 3.125% exchangeable senior notes due 2030 (the "notes") in a private offering (the "offering") by Jazz Investments I Limited, its wholly-owned subsidiary (the "Issuer"), to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The Issuer also granted the initial purchasers of the notes an option, exercisable within a period of 13 days from and including the date the notes are first issued, to purchase up to an additional $150 million aggregate principal amount of notes. The sale of the notes is expected to close on September 6, 2024, subject to customary closing conditions.

The notes will be general unsecured obligations of the Issuer and will accrue interest payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2025, at a rate of 3.125% per year. The notes will mature on September 15, 2030, unless earlier exchanged, redeemed or repurchased. Prior to June 15, 2030, the notes will be exchangeable only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The Issuer will settle exchanges by paying cash up to the aggregate principal amount of the notes to be exchanged. The remainder, if any, of the Issuer's exchange obligation in excess of the aggregate principal amount of the notes will be settled in cash, ordinary shares of Jazz Pharmaceuticals ("ordinary shares") or a combination of cash and ordinary shares, at the Issuer's election. The initial exchange rate will be 6.5339 ordinary shares per $1,000 principal amount of notes (equivalent to an initial exchange price of approximately $153.05 per ordinary share, which represents a premium of approximately 40.0% above the closing sale price per ordinary share on the Nasdaq Global Select Market on September 3, 2024), subject to adjustment in some events but not for any accrued and unpaid interest.

The Issuer's obligations under the notes will be fully and unconditionally guaranteed on a senior unsecured basis by Jazz Pharmaceuticals; will rank pari passu in right of payment with the Issuer's existing 2.000% exchangeable senior notes due 2026; will be effectively subordinated to the Issuer's guarantees of the indebtedness under Jazz Pharmaceuticals' credit agreement (the "credit agreement") and Jazz Pharmaceuticals' 4.375% senior secured notes due 2029 (the "senior secured notes") to the extent of the value of the assets securing such guarantees; and will be structurally subordinated to the indebtedness and guarantees under the credit agreement and the senior secured notes of Jazz Pharmaceuticals' other subsidiaries that are borrowers or have provided guarantees of such indebtedness.

The Issuer may redeem the notes at its option prior to September 15, 2030, in whole but not in part, in connection with certain tax-related events. The Issuer also may redeem the notes at its option on or after September 20, 2027, and prior to June 15, 2030, in whole or in part (subject to certain limitations), if the last reported sale price of the ordinary shares has been at least 130% of the exchange price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Issuer provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

If Jazz Pharmaceuticals undergoes a "fundamental change," subject to certain conditions and limited exceptions, holders of the notes may require the Issuer to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events that occur prior to the maturity date of the notes or upon the Issuer's issuance of a notice of redemption, the Issuer will, in certain circumstances, increase the exchange rate for holders of the notes who elect to exchange their notes in connection with such a corporate event or exchange their notes called (or deemed called) for redemption during the related redemption period, as the case may be.

The Issuer estimates that the net proceeds from the offering will be approximately $833.7 million (or approximately $981.0 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers' estimated discounts and commissions and estimated offering expenses payable by the Issuer. Jazz Pharmaceuticals, together with its consolidated subsidiaries ("Jazz"), expects to use a portion of the net proceeds to prepay up to approximately $350 million aggregate principal amount of the term loans outstanding under the credit agreement and the remainder for general corporate purposes. If the initial purchasers exercise their option to purchase additional notes, Jazz expects to use the net proceeds from the sale of the additional notes for further prepayments of the term loans.

Jazz Pharmaceuticals repurchased approximately $150.0 million of its ordinary shares from purchasers of the notes in privately negotiated transactions with or through one of the initial purchasers concurrently with the pricing of the offering (the "concurrent ordinary share repurchases"). The purchase price per ordinary share repurchased in such concurrent ordinary share repurchases was $109.32 per ordinary share, which was the closing price per ordinary share on September 3, 2024. Jazz Pharmaceuticals will pay for such repurchases with existing cash on hand and such repurchases will be effected as part of Jazz Pharmaceuticals' share repurchase program announced in July 2024. Accordingly, the concurrent ordinary share repurchases reduced the remaining amount authorized under the share repurchase program.

The concurrent ordinary share repurchases could increase, or reduce the size of any decrease in, the market price of the ordinary shares, including concurrently with the pricing of the notes, which could have resulted in a higher effective exchange price for the notes. The closing of the notes is not contingent upon the closing of the repurchase of any ordinary shares.

None of the notes, the guarantee or the ordinary shares issuable upon exchange of the notes, if any, have been registered under the Securities Act or the securities laws of any other jurisdiction, and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.

This press release does not and shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

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