iRhythm Plans $450M Note Offering

By Bobby Samwell • Monday, March 04 15:21 • Permanent Link

Irhythm Technologies, Inc. has announced its intention to offer $450.0 million aggregate principal amount of convertible senior notes due 2029 in a private placement to qualified institutional buyers. The company also plans to grant the initial purchasers of the notes an option to purchase up to an additional $67.5 million aggregate principal amount of notes.

The notes will be senior, unsecured obligations of Irhythm, with interest payable semi-annually in arrears. They will mature on September 1, 2029, unless earlier converted, repurchased, or redeemed. Prior to March 5, 2027, the notes will not be redeemable, and on or after that date, Irhythm may redeem for cash all or part of the notes, subject to certain conditions.

Additionally, holders of the notes will have the right to require Irhythm to repurchase for cash all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change as defined in the indenture relating to the notes.

The company intends to use a portion of the net proceeds from the offering to pay the cost of capped call transactions and to repay indebtedness outstanding under its credit, security, and guaranty agreement with Braidwell Transaction Holdings LLC – Series 5. Irhythm also plans to use a portion of the net proceeds to repurchase shares of its common stock concurrently with the offering and for general corporate purposes.

In connection with the pricing of the notes, Irhythm expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers of the notes, their respective affiliates, and/or other financial institutions, which are expected to reduce the potential dilution to Irhythm’s common stock upon conversion of the notes and/or offset any cash payments that Irhythm is required to make in excess of the principal amount of any converted notes, subject to a cap.

The market has reacted to these announcements by moving the company's shares -8.0% to a price of $110.9. Check out the company's full 8-K submission here.

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