New Issue: IDEC $675 million proceeds convertibles yield 1.75%, up 35%

By Ronda Fears

Nashville, Tenn., April 24 - IDEC Pharmaceuticals sold $675 million in proceeds of 30-year zero-coupon convertible senior unsecured notes at 59.29 for a 1.75% yield-to-maturity and a 35% initial conversion premium, via sole lead manager Merrill Lynch & Co. The Rule 144A deal sold at the middle of yield price talk and at the cheap end of premium guidance.

The San Diego, Calif.-based biotech firm said it will use some of the proceeds to buy back up to $135 million of its common stock simultaneously with the issue, which is an enticement for hedged convertible buyers. Remaining proceeds will be used for general corporate purposes, including capital expenditures and working capital. Also, IDEC said it plans to enter into negotiations with holders of its outstanding 0% convertible notes due 2019 to obtain agreements to convert those notes into common stock. The issue is deep in the money.

Terms of the new deal are:

Issuer: IDEC Pharmaceuticals

Amount: $675 million (proceeds)

Greenshoe: $75 million (proceeds)

Lead Manager: Merrill Lynch

Maturity Date: May 1, 2032

Coupon: 0.0%

Issue Price: 59.29

Yield: 1.75%

Conversion Premium: 35%

Conversion Price: $82.553

Conversion Ratio: 7.182

Call: non-callable for five years

Put: in years three, five, 10, 15, 20 and 25

Contingent Conversion: no

Contingent Payment: no

Rating(s): S&P: BB

Settlement Date: April 30

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.