Moderna Inc.'s shares declined 5% on Thursday after the biotech company unveiled plans to issue $2 billion in senior convertible notes, with an additional $300 million option for initial buyers.
The notes, maturing in 2032, will be unsecured senior obligations without regular interest payments. Upon conversion, Moderna may settle in cash, common stock, or a combination of both at its discretion. The initial cap price for conversion will exceed the last reported stock price by at least 150%, according to the offering terms.
Proceeds from the offering are earmarked for general corporate purposes, including investments in the company’s oncology business, debt repayment, and privately negotiated capped call transactions. The capped call structure is intended to mitigate dilution risk to shareholders upon conversion of the notes.
In parallel, option counterparties or their affiliates are expected to purchase Moderna’s common stock and execute derivative transactions as part of hedging arrangements for the capped calls. The 13-day option period for initial buyers to acquire additional notes follows the issuance.
The offering is structured under Rule 144A of the U.S. Securities Act, with pricing and terms subject to market conditions at the time of issuance.
