By Abigail W. Adams
Portland, Me., Feb. 11 – Kadmon Holdings Inc. priced an upsized $200 million of six-year convertible notes prior to the market open on Thursday at par with a coupon of 3.625% and an initial conversion premium of 30%, according to a company news release.
Pricing came toward the rich end of talk for a coupon of 3.25% to 3.75% and at the rich end of talk for an initial conversion premium of 25% to 30%, according to a market source.
Cantor Fitzgerald & Co. is the bookrunner for the Rule 144A offering, which carries an upsized greenshoe of $40 million.
The initial size of the offering was $150 million with a greenshoe of $30 million.
The notes are non-callable until Feb. 20, 2024 and then subject to a 130% hurdle.
They are putable upon a fundamental change. There is dividend protection.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company entered into capped call transactions with a cap price of $10.70, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $194 million or will be $233 million if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the call spread and for the research and development and commercialization of drug candidates.
Kadmon is a New York-based biopharmaceutical company.
| Issuer: | Kadmon Holdings Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $200 million
|
| Greenshoe: | $40 million
|
| Maturity: | Feb. 15, 2027
|
| Bookrunner: | Cantor Fitzgerald & Co.
|
| Co-managers: | Mizuho Securities USA Inc. (lead), H.C. Wainwright & Co., Oppenheimer & Co. and Raymond James & Associates
|
| Coupon: | 3.625%
|
| Price: | Par
|
| Yield: | 3.625%
|
| Conversion premium: | 30%
|
| Conversion price: | $6.96
|
| Conversion rate: | 143.7815
|
| Call options: | Non-callable until Feb. 20, 2024 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Feb. 11
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| Settlement date: | Feb. 16
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| Distribution: | Rule 144A
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| Talk: | Coupon of 3.25% to 3.75% and initial conversion premium of 25% to 30%
|
| Stock symbol: | Nasdaq: KDMN
|
| Stock price: | $5.35 at market close Feb. 10
|
| Market capitalization: | $917.59 million
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