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Illumina Announces Pricing of Convertible Senior Notes

Published: Monday, June 09, 2014
Last Updated: Monday, June 09, 2014
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The Notes are being offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act").

Illumina, Inc. today announced the pricing of an offering of $550 million aggregate principal amount of its 0% convertible senior notes due 2019 (the "2019 Notes") and $450 million aggregate principal amount of its 0.5% convertible senior notes due 2021 (the "2021 Notes" and, together with the 2019 Notes, the "Notes"). The Notes are being offered to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Illumina has granted the initial purchasers an option to purchase up to an additional $82.5 million aggregate principal amount of the 2019 Notes and $67.5 million aggregate principal amount of the 2021 Notes on the same terms and conditions referenced above. The 2019 Notes will not bear interest and will mature on June 15, 2019, unless earlier repurchased or converted. Interest on the 2021 Notes will be paid semi-annually at a rate of 0.50% per year and the Notes will mature on June 15, 2021, unless earlier repurchased or converted.

The Notes will be convertible, subject to the satisfaction of certain conditions, into cash, shares of Illumina common stock or a combination thereof, at Illumina's election. Prior to March 15, 2019 (in the case of the 2019 Notes) or March 15, 2021 (in the case of the 2021 Notes), the Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time through the second scheduled trading day immediately preceding the maturity date. The initial conversion rate of both the 2019 Notes and the 2021 Notes is 3.9318 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $254.34 per share of common stock, subject to adjustment in certain circumstances. This initial conversion price represents a premium of 55% relative to the last reported sale price on June 5, 2014 of Illumina's common stock of $164.09.

The aggregate net proceeds to Illumina from the offering of the 2019 Notes and 2021 Notes will be approximately $985 million, exclusive of any proceeds attributable to the initial purchasers' possible exercise of their options to purchase additional Notes. Illumina expects to use the net proceeds from the offering and cash on hand to fund repurchases of up to $600 million aggregate principal amount of its outstanding 0.25% Convertible Senior Notes due 2016 (the "2016 Notes") through privately negotiated transactions. The offering is expected to close on June 11, 2014, subject to customary closing conditions.

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