Nashville, Dec. 9 - Sepracor Inc. sold $600 million of convertible notes in two parts in the overnight Rule 144A market via sole bookrunner Morgan Stanley & Co. Inc. with a portion of proceeds earmarked to redeem its 5.75% convertible notes due 2006.
Tranche A, a $200 million five-year convertible issue, was sold at par to yield 0% with a 24% initial conversion premium - at the cheap end of price talk for a 0% yield, up 24% to 32%.
Tranche B, a $400 million seven-year convertible issue, was sold at par to yield 0% with a 16% initial conversion premium - at the cheap end of price talk for a 0% yield, up 16% to 24%.
First, Sepracor said it intends to use proceeds to redeem all of its $435 million outstanding 5.75% convertible subordinated notes due 2006 plus accrued but unpaid interest.
The company also intends to use $94.8 million of proceeds to enter into call spread transactions to reduce the potential dilution from conversion of the notes. In addition, deal managers will purchase up to 8 million shares of Sepracor's common stock in secondary market transactions concurrently with, prior to and possibly after pricing the notes, Sepracor said.
Any remaining funds will be used for general corporate purposes.
The notes will be subordinated to all of the existing and future senior debt but ranked senior to Sepracor's 5.75% convertible and its 5% convertible subordinated debentures due 2007.
Terms of the deal are:
Tranche A
| Issuer: | Sepracor Inc.
|
| Issue: | Convertible senior subordinated notes
|
| Bookrunner: | Morgan Stanley & Co. Inc.
|
| Joint lead manager: | Credit Suisse First Boston
|
| Amount: | $200 million
|
| Greenshoe: | $50 million
|
| Maturity: | Dec. 15, 2008
|
| Coupon: | 0%
|
| Price: | Par
|
| Yield: | 0%
|
| Conversion premium: | 24%
|
| Conversion price: | $31.89
|
| Conversion ratio: | 31.355
|
| Call: | Non-callable
|
| Price talk: | 0%, up 24-32%
|
| Pricing date: | Dec. 9, before the open
|
| Settlement date: | Dec. 12
|
| Distribution: | Rule 144A
|
|
|
| Tranche B
|
| Issuer: | Sepracor Inc.
|
| Issue: | Convertible senior subordinated notes
|
| Bookrunner: | Morgan Stanley & Co. Inc.
|
| Joint lead manager: | Credit Suisse First Boston
|
| Amount: | $400 million
|
| Greenshoe: | $100 million
|
| Maturity: | Dec. 15, 2010
|
| Coupon: | 0%
|
| Price: | Par
|
| Yield: | 0%
|
| Conversion premium: | 16%
|
| Conversion price: | $29.84
|
| Conversion ratio: | 33.5175
|
| Call: | Non-callable
|
| Price talk: | 0%, up 16-24%
|
| Pricing date: | Dec. 9, before the open
|
| Settlement date: | Dec. 12
|
| Distribution: | Rule 144A
|
|
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