By Kenneth Lim
Boston, May 18 - Enzon Pharmaceuticals Inc. priced an upsized $225 million offering of seven-year convertible senior notes late Wednesday at the cheap end of talk, with a coupon of 4% and an initial conversion premium of 25%.
Price talk was for a coupon of 3.5% to 4% and an initial conversion premium of 25% to 30%. There is also an over-allotment option for a further $50 million on the deal, which was originally worth $175 million plus a $50 million greenshoe.
The convertibles were offered at par and have an initial conversion price of $9.55 per share. Enzon stock (Nasdaq: ENZN) closed at $7.64 on Wednesday.
Goldman Sachs was the bookrunner of the Rule 144A deal.
The convertibles are non-callable for the first three years, after which they may be called only if Enzon stock exceeds 140% of the conversion price. There are no puts.
The convertibles have dividend protection and a change-of-control put with premium make-whole.
There are no contingent conversion or contingent payment features.
Enzon, a Bridgewater, N.J.-based biopharmaceutical company, will use the proceeds of the offering to buy back its existing 4.5% convertible subordinated notes due 2008, of which $394 million is still outstanding. Investment advisory firm Franklin Advisors Inc. has agreed to sell $128 million of the 4.5% convertibles back to Enzon and to buy at least $75 million of the new convertibles.
| Issuer: | Enzon Pharmaceuticals Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Goldman Sachs
|
| Amount: | $225 million
|
| Greenshoe: | $50 million
|
| Maturity: | June 1, 2013
|
| Coupon: | 4%
|
| Price: | Par
|
| Yield: | 4%
|
| Conversion premium: | 25%
|
| Conversion price: | $9.55
|
| Conversion ratio: | 104.7120
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable for 3 years, thereafter callable subject to 140% hurdle
|
| Puts: | None
|
| Price talk: | 3.5%-4%, up 25%-30%
|
| Pricing date: | May 17
|
| Distribution: | Rule 144A
|
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