By Angela McDaniels and Rebecca Melvin
Tacoma, Wash., Jan. 23 - Emergent BioSolutions Inc. priced $215 million of 2.875% seven-year convertible senior notes after the market close Thursday with an initial conversion premium of 37.5%, according to a company news release.
The issue was upsized from $200 million.
There is a $35 million over-allotment option, which was increased from $30 million.
The Rule 144A offering was being sold via BofA Merrill Lynch and J.P. Morgan Securities LLC, a syndicate source said.
The convertibles were talked to yield 2.625% to 3.125% with an initial conversion premium of 27.5% to 32.5%.
The bonds are non-callable for three years and then are provisionally callable if shares exceed 130% of the conversion price, and there are no puts, according to the syndicate source.
Emergent may terminate conversion rights beginning Jan. 20, 2017 if the last reported sale price of its common stock has been at least 130% of the conversion price for at least 20 out of 30 consecutive trading days.
There is no "sinking fund" provided for the notes, which means that Emergent will not be required to redeem or retire the notes periodically.
The majority of the proceeds will be used to finance the company's previously announced acquisition of Cangene Corp. Any remaining proceeds will be used for general corporate purposes.
Emergent is a specialty pharmaceutical company based in Rockville, Md.
| Issuer: | Emergent BioSolutions Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $215 million
|
| Greenshoe: | $35 million
|
| Maturity: | 2021
|
| Bookrunners: | BofA Merrill Lynch and J.P. Morgan Securities LLC
|
| Coupon: | 2.875%
|
| Price: | Par
|
| Yield: | 2.875%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $32.38
|
| Conversion ratio: 30.8821
|
| Call option: | Non-callable for three years, then provisionally callable subject to 130% hurdle
|
| Put option: | No
|
| Price talk: | 2.625%-3.125%, up 27.5%-32.5%
|
| Pricing date: | Jan. 23
|
| Settlement date: | Jan. 29
|
| Stock symbol: | NYSE: EBS
|
| Stock price: | $23.55 at close Jan. 23
|
| Distribution: | Rule 144A
|
| Market capitalization: | $856.44 million
|
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