By Rebecca Melvin
New York, June 7 – The Medicines Co. priced $350 million of seven-year convertible senior notes after the market close on Monday at par to yield 2.75% with an initial conversion premium of 32.5%, according to a news release.
Pricing of the Rule 144A deal came at the midpoint of 2.5% to 3% coupon talk and at the rich end of 27.5% to 32.5% talk for the premium.
Goldman Sachs & Co. and J.P. Morgan Securities LLC were joint bookrunners for the deal for which there is a $52.5 million greenshoe.
The notes are non-callable for four years and then provisionally callable if shares exceed 130% of the conversion price. There are no investor puts. There is takeover and dividend protection. There is also contingent conversion and net share settlement.
About $325 million of the proceeds will be used to repurchase about $220 million of Medicines’ 1.375% convertible notes due 2017. The price of the 2017 notes repurchased is subject to privately negotiated transactions effected though one of the initial purchasers. Proceeds may also be used to purchase additional 2017 notes from time to time following the pricing of the notes.
In connection with the pricing of the notes, the company enter into capped call transactions with one or more of the initial purchasers or affiliates. About $29.5 million of proceeds will be used to pay the cost of the capped call transactions.
Remaining proceeds are earmarked for general corporate purposes, including working capital and research and development expenditures.
Parsippany, N.J.-based Medicines develops products that improve specialized care.
| Issuer: | The Medicines Co.
|
| Issue: | Convertible senior notes
|
| Amount: | $350 million
|
| Greenshoe: | $52.5 million
|
| Maturity: | July 15, 2023
|
| Bookrunners: | Goldman Sachs & Co., J.P. Morgan Securities LLC
|
| Coupon: | 2.75%
|
| Price: | Par
|
| Yield: | 2.75%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $48.97
|
| Conversion ratio: | 20.4198 shares
|
| Calls: | Non-callable for four years, then provisionally callable at 130% price hurdle
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Capped call: | Yes
|
| Contingent conversion: | Yes
|
| Net share settlement: | Yes
|
| Price talk: | 2.5%-3%, up 27.5%-32.5%
|
| Pricing date: | June 6
|
| Settlement date: | June 10
|
| Stock symbol: | Nasdaq: MDCO
|
| Stock reference price: | $36.96 at close June 6
|
| Distribution: | Rule 144A
|
| Market capitalization: | $2.57 billion
|
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