Emergent greenshoe ups 2.875% seven-year convertibles to $250 million

By Susanna Moon

Chicago, Jan. 27 - Emergent BioSolutions Inc. said underwriters fully exercised the $35 million over-allotment option on its 2.875% seven-year convertible senior notes, bringing the total deal size to $250 million.

Settlement will occur on Jan. 29, according to a company press release.

As previously announced, the company priced $215 million of the convertibles after the market close Jan. 23 with an initial conversion premium of 37.5%. The issue was upsized from $200 million.

The greenshoe 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 previously told Prospect News.

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.

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