Sarepta Therapeutics Inc. SRPT, +0.89% said Wednesday it has priced $980 million of convertible senior unsecured notes that mature in September of 2027. The company will reduce the potential dilution of issuing new shares by entering capped call transactions with one or more dealers. Proceeds will be used to cover the cost of those transactions, as well as to repurchase convertible notes due in 2024, terminate a credit agreement, and fund general corporate purposes. The notes will bear cash interest at a rate of 1.25% payable twice a year. The initial conversion rate for the notes is 7.0439 shares of Sarepta’s common stock per $1,000 principal amount of notes, equal to an initial conversion price of about $141.97 per share, or a roughly 35.0% conversion premium based on the stock’s closing price on Tuesday. Shares were not yet active premarket, but have gained 17% in the year to date, while the S&P 500 SPX, +0.28% has fallen 17%.
