Qiagen has completed the issuance of USD 400 million aggregate principal amounts of convertible notes due 2023. The notes will bear interest at an annual rate of 0.50 percent, payable semiannually in arrears. The initial conversion price has been set at USD 41.4102 per share of common stock. In the event of an exercise of their conversion right, noteholders will receive a cash amount equivalent to the value of Qiagen's common shares underlying the notes. No shares will be issued by Qiagen upon conversion of the notes. The expected settlement date of the notes is September 13, 2017, and application will be made for the notes to be admitted to trading on the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange.
In connection with the notes offering, Qiagen entered into privately negotiated convertible note hedge transactions with one or more joint bookrunners for the notes offering or other financial institutions (the dealers) or their affiliates, initially covering the same number of Qiagen's common shares as underlie the notes. The convertible note hedge transactions will be cash settled upon exercise and are expected to offset any cash payments Qiagen is required to make in excess of the principal amount of notes upon conversion. Qiagen also entered into separate privately negotiated warrant transactions with such dealers or their affiliates, initially covering the same number of Qiagen's common shares as underlie the notes. The warrant transaction could separately have a dilutive effect with respect to Qiagen's common shares to the extent that the market price per share of Qiagen's common shares upon expiration of the warrants exceeds the strike price of the warrants that will initially be approximately USD 50.97.
In connection with these convertible note hedge and warrant transactions, such dealers or their affiliates entered into various derivatives transactions and engaged in other activities that may have had the effect of increasing or preventing a decline in the price of Qiagen's common stock in connection with the pricing of the notes offering, and may continue to enter into such transactions. These activities may be discontinued at any time. In addition, from time to time and in connection with any conversion of the notes, such dealers or their respective affiliates may enter into or unwind derivative transactions and engage in other activities that could adversely impact the price of Qiagen's common stock and of the notes.
The net proceeds from these transactions are planned to be used for general corporate purposes, including entry into the convertible note hedge and warrant transactions. Under the terms of the notes offering, Qiagen has agreed not to sell any securities that are substantially similar to the notes or its common shares for a lock-up period ending 90 days following the settlement date, subject to customary exceptions.