San Diego-based NuVasive, Inc. has announced that it intends to offer $400 million in 1.00% convertible senior notes due 2023. This offering will be made to qualified institutional buyers only. NuVasive will grant these initial purchasers a 13-day option to purchase up to an additional $50 million of the convertible senior notes.
NuVasive to Offer $400 Million of 1.00% Convertible Senior Notes
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NuVasive made the offering pursuant to Rule 144A of the Securities Act of 1933. The Securities and Exchange Commission (SEC) places restrictions on trades of privately placed securities. Rule 144A provides a safe harbor so privately placed securities can be traded among qualified institutional buyers with no SEC registration. Rule 144A also provides for much shorter holding periods.
NuVasive expects to receive $387.5 million in net proceeds from the sale of the convertible senior notes. This total does not include the purchasers’ option to purchase additional convertible senior notes or NuVasive’s deductions for fees and expenses.
The senior convertible notes are unsecured obligations. Interest will be paid on June 1 and December 1 of each year. The first payment will be on December 1, 2020.
The initial conversion rate for the notes is 11.8778 shares of common stock for every $1,000 principal in convertible notes. This is equivalent to approximately $84.19 per share of NuVasive common stock.
Accrued and unpaid interest will not adjust the conversion rate and conversion price. According to NuVasive, “The initial conversion price of the notes represents a premium of approximately 32.50% to the $63.54 per share closing price of NuVasive’s common stock on May 27, 2020.”
Incorporated in 1997, NuVasive is a medical technology company focused on developing minimally invasive spine surgery devices and procedures. Its solutions are designed for lumbar degenerative disc disease, lumbar spinal stenosis, degenerative spondylolisthesis, degenerative scoliosis, cervical disc degeneration, back pain, and early onset scoliosis. NuVasive completed its initial public offering on May 13, 2004.
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This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
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