Tandem Diabetes Care Announces Proposed Private Placement of Convertible Notes

Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a global insulin delivery and diabetes technology company, announced today that it intends to offer, subject to market conditions and other factors, $250.0 million aggregate principal amount of its Convertible Senior Notes due 2029 (the “notes”) in a private placement (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Tandem also intends to grant the initial purchasers of the notes an option to purchase, within the 13-day period beginning on, and including, the first date on which the notes are issued, up to an additional $37.5 million principal amount of notes.

The notes will be general unsecured obligations of Tandem and will accrue interest payable semiannually in arrears. Upon conversion, Tandem will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election. The interest rate, initial conversion rate and other terms of the notes will be determined at the time of pricing of the offering.

Tandem expects to use the net proceeds from the offering, together with cash on hand, to pay the cost of the capped call transactions described below, to repurchase for cash certain of its 1.50% Convertible Senior Notes due 2025 (the “2025 notes”) and to repurchase up to $30.0 million of its common stock in privately negotiated transactions, each as described below. If the initial purchasers exercise their option to purchase additional notes, Tandem expects to use a portion of the net proceeds from the sale of the additional notes to enter into additional capped call transactions and the remainder for general corporate purposes, which may include additional repurchases of the 2025 notes from time to time following this offering, or the repayment at maturity, of the 2025 notes.

In connection with the pricing of the notes, Tandem expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers or their respective affiliates and/or certain other financial institutions (the “option counterparties”). The capped call transactions will cover, subject to customary adjustments, the number of shares of Tandem’s common stock that will initially underlie the notes. The capped call transactions are expected to offset the dilution to Tandem’s common stock as a result of any conversion of the notes, with such offset subject to a cap.