Kendle greenshoe exercise raises total 3.375% convertibles issued to $200 million

By Susanna Moon

Chicago, July 16 - Kendle International Inc. said underwriters exercised the $25 million over-allotment option on its 3.375% convertible senior notes due July 15, 2012, bringing the total raised to $200 million.

The company priced an upsized $175 million of the convertibles on July 11 with an initial conversion premium of 32.5%.

The bonds were increased from a planned amount of $150 million and came in at the mid range of talk, which was for a coupon of 3.125% to 3.625% with an initial conversion premium of 30% to 35%.

UBS Investment Bank is the bookrunner for the off-the-shelf offering. There was a $25 million over-allotment option.

The convertibles were issued at par and have an initial conversion rate of 20.9585 and a conversion price of $47.71.

The bonds have a 130% contingent conversion hurdle. Conversion also will 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 stock.

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.

The stock (Nasdaq: KNDL) closed at $36.84 on July 13.

Kendle International is a Cincinnati-based clinical research organization that provides clinical research services to the biopharmaceutical industry.

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