RARE Daily

BridgeBio Prices Upsized Offering of $650 Million Convertible Senior Notes

January 26, 2021

Rare Daily Staff

BridgeBio Pharma said it priced $650 million of convertible senior notes in a private offering to institutional investors, upsizing the previously announced offering from $400 million.

The company granted the initial purchasers an option to purchase up to an additional $97.5 million of notes. The notes have an aggregate principal amount of 2.25 percent and are due February 1, 2029.  The sale of the notes is expected to close on January 28, 2021.

The notes are only convertible upon satisfaction of certain conditions and during certain periods. After that time, the notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

The notes will be convertible at the option of the holders, subject to certain conditions and during certain periods. If a holder chooses to convert the notes, the company can choose to pay cash, issue common stock, or use a combination of cash and shares.

The conversion rate will initially be based on a conversion price of approximately $97.04 per share. The initial conversion price of the notes represents a premium of approximately 47.5 percent over the last reported sale price of the company’s common stock of $65.79 per share on January 25, 2021.

In connection with the pricing of the notes, the company entered privately negotiated capped call transactions with certain of the initial purchasers and their respective affiliates and certain other financial institutions. These capped call transactions are expected to reduce the potential dilution to the company’s common stock upon any conversion of the notes and offset any cash payments the company is required to make in excess of the principal amount of converted notes.

The cap price of the capped call transactions will initially be $131.58 per share, which represents a premium of 100 percent over the last reported sale price of the company’s common stock of $65.79 per share on January 25, 2021 and is subject to certain adjustments under the terms of the capped call transactions.

BridgeBio intends to use $53.3 million of the net proceeds from the offering of the notes to pay the cost of the capped call transactions, and approximately $50 million of the net proceeds from the offering to repurchase shares of its common stock concurrent with the closing of the offering from certain purchasers of the notes in privately negotiated transactions.

Photo: Neil Kumar, founder and CEO of BridgeBio

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