By Kenneth Lim
Boston, March 24 - King Pharmaceuticals Inc. priced its $400 million offer of 20-year convertible senior notes on Friday at the cheap end of talk with a coupon of 1.25% and an initial conversion premium of 20%.
The notes, which mature on April 1, 2026, were talked at a coupon between 0.75% and 1.25% with an initial conversion premium between 20% and 25%, market sources confirmed.
Citigroup, UBS Investment Group and Banc of America Securities were the bookrunners of the Rule 144A deal. They have a greenshoe option to purchase a further $60 million of notes.
The convertibles were offered at par, and may be converted into King Pharmaceuticals shares at an initial conversion price of $20.83, or a conversion ratio of 48.0031 shares for every note.
The convertibles are non-callable for the first seven years, and have puts in years seven, 10 and 15.
There is a contingent conversion trigger at 110% and contingent payment at 120%.
The securities have dividend protection and takeover protection in the form of a premium make-whole feature and a change-of-control put.
The convertibles also have a net-share settlement feature.
The Bristol, Tenn.-based pharmaceutical company has earmarked the proceeds of the deal to redeem or repurchase its existing 2.75% convertibles due 2021, of which $345 million remain outstanding. It will also use the proceeds for general corporate purposes.
| Issuer: | King Pharmaceuticals Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Citigroup, UBS Investment Group and Banc of America Securities
|
| Amount: | $400 million
|
| Greenshoe: | $60 million
|
| Maturity: | April 1, 2026
|
| Coupon: | 1.25%
|
| Price: | Par
|
| Yield: | 1.25%
|
| Conversion premium: | 20%
|
| Conversion price: | $20.83
|
| Conversion ratio: | 48.0031
|
| Contingent conversion: | 110%
|
| Contingent payment: | 120%
|
| Net-share settlement: | Yes
|
| Dividend protection: | Yes
|
| Takeover protection: | Change of control put with premium make whole
|
| Hard-call protection: | Non-callable 7 years
|
| Puts: | Years 7, 10, 15
|
| Price talk: | 0.75%-1.25%, up 20%-25%
|
| Pricing date: | March 24
|
| Settlement date: | March 29
|
| Distribution: | Rule 144A
|
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