SENIOR CONVERTIBLE NOTES

12 Months Ended

Dec. 31, 2011

SENIOR CONVERTIBLE NOTES [Abstract]

SENIOR CONVERTIBLE NOTES

NOTE 13-SENIOR CONVERTIBLE NOTES

On November 13, 2007, the Company issued $316.3 million principal amount of 3.50% Senior Convertible Notes (the "Notes") due January 15, 2038. The net proceeds after issuance costs from the Notes offering were approximately $309.4 million. The Notes bear interest of 3.50% per year on the principal amount payable semi-annually in arrears on January 15 and July 15 of each year. The Company incurred underwriter discount and issuance costs of approximately $6.9 million, which are being amortized over the effective life of the Notes which is five years, the period up to the first date that the holders of the Notes (the "Holders") can require the Company to repurchase the Notes.

The Notes are convertible into 33.1991 shares of Affymetrix common stock per $1,000 principal amount of Notes which equates to 10,499,215 shares of common stock, or a conversion price equivalent of $30.12 per share of common stock. The conversion rate is subject to adjustment upon the occurrence of the following specified events:

. issuing shares of the Company's common stock as a dividend or distribution of the Company's common stock;

. effecting a stock split or stock combination;

. issuing to all or substantially all Holders of the Company's common stock any rights or warrants under certain circumstances and with certain entitlements;

. distributing shares of the Company's common stock, evidences of indebtedness or other assets or property, to all or substantially all Holders of the Company's common stock, with certain exceptions;

. making cash distributions to all or substantially all Holders of the Company's common stock; or

. should the Company or any of its subsidiaries purchase shares of its common stock pursuant to a tender offer at a premium to market.

Holders may convert their Notes into shares of Affymetrix stock at any time at their option at the initial conversion rate, subject to adjustment, prior to the close of business on the business day prior to the maturity date.

On January 15, 2013, 2018 and 2028, the security holders have the option to require the Company to repurchase the Notes at a price equal to 100% of the principal amount of the Notes plus accrued interest. Additionally, on or after January 15, 2013, Affymetrix has the option of redeeming for cash at 100% of the principal amount all or part of the then outstanding Notes plus accrued interest.

The Notes are unsecured and rank equally with the Company's other existing and future senior indebtedness. The Notes are structurally subordinated to any current or future indebtedness and other liabilities of the Company's subsidiaries.

There were no purchases of Notes in 2011. In 2010 and 2009, the Company repurchased a total of $220.8 million of aggregate principal amount of the Notes for total cash consideration of $194.2 million, including accrued interest of $2.4 million. The recognized gain on debt repurchase of $23.7 million is net of transaction costs of $1.3 million and accelerated amortization of deferred financing costs of $2.4 million.

As of December 31, 2011, the balance remaining on the Notes was $95.5 million.

On February 3, 2012, the Company commenced a cash tender offer to repurchase the entire aggregate outstanding principal amount of its Notes at par plus accrued and unpaid interest from the last interest payment date applicable to the Notes to, but not including, the settlement date for the tender offer. Refer to Note 20, "Subsequent Events" for further information.