Tandem Diabetes Care plans $200 million convertible notes offering

Tandem Diabetes Care Inc. (NASDAQ: TNDM) announced plans to offer $200 million in convertible senior notes due 2032 through a private placement to qualified institutional buyers. The diabetes technology company also intends to grant initial purchasers an option to buy up to an additional $30 million in notes within 13 days of issuance.

The notes will be unsecured obligations that accrue interest payable semiannually. Upon conversion, Tandem may pay cash, shares of common stock, or a combination of both at its discretion. Interest rates, conversion rates and other terms will be determined at pricing.

Tandem expects to use net proceeds to pay for capped call transactions and general corporate purposes, including potential acquisitions, strategic investments, working capital, operating expenses and capital expenditures. If purchasers exercise the additional notes option, proceeds would fund additional capped call transactions and general corporate purposes.

The company plans to enter capped call transactions with initial purchasers or affiliates and financial institutions. These transactions are designed to offset potential dilution from note conversions, subject to a cap covering shares initially underlying the notes.

In establishing hedges for the capped call transactions, counterparties or affiliates may enter derivative transactions or purchase Tandem shares around the notes' pricing. This activity could affect the market price of Tandem's stock or the notes. Similar hedging activities may continue throughout the notes' life, particularly during a 40 trading day period before maturity.

The notes and any shares issuable upon conversion have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States without registration or applicable exemptions.

San Diego-based Tandem manufactures automated insulin delivery systems including the Tandem Mobi system and t:slim X2 insulin pump, both featuring Control-IQ+ technology.

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