Halozyme Therapeutics Issues $1.5B 1.50% Convertible Notes Due 2033

What Happened

• Halozyme Therapeutics, Inc. announced on September 22, 2026 that it completed the sale of $1,500.0 million aggregate principal amount of 1.50% Convertible Senior Notes due 2033 (including $200.0 million from initial purchasers’ option exercise). The notes were issued under an indenture with The Bank of New York Mellon Trust Company, N.A. as trustee and sold to qualified institutional buyers under Rule 144A and Section 4(a)(2) exemptions.
• Net proceeds were approximately $1,471.1 million. The company used about $187.5 million to fund capped call transactions and expects to use part of the remainder to repurchase portions of its outstanding 0.25% convertible notes due 2027 and 1.00% convertible notes due 2028 (privately negotiated repurchases through an agent), with remaining proceeds for general corporate purposes.

Key Details

• Interest rate and payments: 1.50% annually, paid semi‑annually on April 1 and October 1, beginning April 1, 2027.
• Conversion terms: initial conversion rate of 7.1509 shares per $1,000 principal (≈ $139.84 per share). The filing also notes an initial maximum conversion rate of 9.1174 shares per $1,000, meaning up to 13,676,100 shares could be issued upon conversion (subject to adjustment).
• Repurchases expected: plans to repurchase approximately $151.7M principal of 2027 notes and $220.0M principal of 2028 notes, with estimated total repurchase costs of ~$217.0M (2027 notes) and ~$435.5M (2028 notes), respectively.
• Capped calls: entered capped call transactions on Sept 17–18, 2026 to reduce potential dilution; initial cap price ~ $208.39 per share (~90% premium to Sept 17 close). Capped-call counterparties may trade or hedge stock, which could affect market prices; capped calls do not change holders’ contractual rights under the notes.
• Redemption/repurchase features: holders can require repurchase upon certain “Fundamental Change” events; company may redeem notes (with conditions) beginning Oct 7, 2030 and may perform a “cleanup” redemption if outstanding principal falls below $100M. The indenture includes customary events of default.

Why It Matters

• This is a large financing that provides Halozyme with substantial cash — roughly $1.47B net — for general corporate uses (working capital, capex, potential acquisitions) and to reduce existing convertible debt. For investors, the low coupon (1.50%) means modest ongoing interest cost relative to traditional debt, but the notes carry potential equity dilution if converted.
• The capped-call hedges limit dilution only above a relatively high cap (~$208.39/share), so meaningful dilution protection applies only if the stock rises substantially. The company’s planned repurchases of older convertible notes will reduce near-term dilution from those specific issues.
• The notes are unsecured and will rank pari passu with other unsecured debt and behind any secured debt; conversion and redemption mechanics, and the potential for counterparties to hedge, can affect share supply and stock price around conversion or redemption events.