By Rebecca Melvin
New York, Sept. 4 – Depomed Inc. priced an upsized $300 million of seven-year convertible senior notes after the market close Wednesday at par to yield 2.5% with an initial conversion premium of 37%, according to a news release.
Initially the deal size was talked at $230 million. Pricing of the registered, off-the-shelf deal came through the rich end of originally talked terms, which was for a 2.625% to 3.125% coupon and 30% to 35% premium.
There is a $45 million greenshoe, which was increased from $34.5 million. Joint bookrunners were Morgan Stanley & Co. LLC and RBC Capital Markets LLC.
Depomed can call the notes for cash after five years on Sept. 5, 2019, if shares rise to 130% of the conversion price.
Proceeds will be used for working capital and other general corporate purposes and potential acquisitions and strategic transactions.
Newark, Calif.-based Depomed is a specialty pharmaceutical company that commercializes products for pain and disorders of the central nervous system.
| Issuer: | Depomed Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $300 million, upsized from $230 million
|
| Greenshoe: | $45 million, increased from $34.5 million
|
| Maturity: | Sept. 1, 2021
|
| Underwriters: | Morgan Stanley & Co. LLC, RBC Capital Markets LLC
|
| Coupon: | 2.5%
|
| Price: | Par
|
| Yield: | 2.5%
|
| Conversion premium: | 37%
|
| Conversion price: | $19.24 per share
|
| Conversion ratio: | 51.9852 shares
|
| Call: | Non-callable for five years; then provisionally callable if shares exceed 130%
|
| Pricing date: | Sept. 3
|
| Settlement date: | Sept. 9
|
| Price talk: | 2.625%-3.125%, up 30%-35%
|
| Stock symbol: | Nasdaq: DEPO
|
| Stock reference price: | $14.01 at close on Sept. 3
|
| Distribution: | Registered, off the shelf
|
| Market capitalization: | $818.96 million
|
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