KV Pharmaceutical $130 million overnighter talked to yield 2.25-2.75%, up 35-40%

By Ronda Fears

Nashville, May 12 - KV Pharmaceutical Co. launched $130 million of 30-year convertible subordinated notes, which convert into Class A shares of the company, in the overnight market with talk putting the yield at 2.25% to 2.75% with a 35% to 40% initial conversion premium.

Deutsche Bank Securities Inc. and Banc of America Securities are joint lead managers of the Rule 144A deal.

The notes will be noncallable for three years, with puts in years 5, 10, 15, 20 and 25.

There is a 120% contingent conversion trigger, and a 120% contingent interest payment trigger.

There is a $26 million greenshoe available.

KV Pharmaceutical said it plans to use $40 million of proceeds to buy back class A shares and remaining proceeds would be used for future acquisitions and general corporate purposes.

St. Louis-based KV Pharmaceutical is a specialty pharmaceutical company specializing in controlled release and tastemasked products. The company markets through Ethex Corp. and Ther-Rx Corp.

KV Pharmaceutical class A shares ended Monday up 34c, or 1.37%, to $25.10.

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