Kendle International to price $150 million convertible senior notes, talked at 3.125%-3.625%, up 30%-35%

By Evan Weinberger

New York, July 9 - Kendle International Inc. plans to price $150 million in convertible senior notes due July 15, 2012. The deal is talked at a coupon of 3.125% to 3.625% with an initial conversion premium of 30% to 35%.

The deal is expected to price Tuesday after market close.

There is a $22.5 million over-allotment option.

UBS Investment Bank is the bookrunner for the off-the-shelf offering.

The convertibles will be issued at par.

The bonds are convertible into cash or cash and common stock, subject to a 130% hurdle. Conversion will also be permitted if the price drops below 97% of parity. At conversion, holders will receive par in cash and any value over par will be distributed in Kendle International stock.

There are no call or put options. There are full dividend protection and anti-dilution adjustments.

Kendle International is a Cincinnati-based clinical research organization that provides clinical development services to the biopharmaceutical industry. The company plans to use at least 75% of proceeds from the convertible senior notes to pay down a term loan. The rest of the proceeds will be used to enter into convertible note hedge transactions and for general corporate purposes.

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