New Issue: Medicis $350 million convertibles at 2.5% yield, up 25%

By Ronda Fears

Nashville, Tenn., May 30 - Medicis Pharmaceutical Corp. sold $350 million of 30-year convertible senior notes at par to yield 2.5% with a 25% initial conversion premium. Deutsche Bank Securities Inc. was lead manager of the Rule 144A deal, which sold at the aggressive end of price talk.

Guidance had put the yield at 2.5% to 3.0% and initial conversion premium at 20% to 25%.

The Scottsdale, Ariz.-based specialty pharmaceutical company, which focuses on dermatology treatments and pediatric conditions, plans to use proceeds first to buy back $125 million of common stock sold short by purchasers of the convertible.

Remaining proceeds of around $161 million are earmarked for future acquisitions and general corporate purposes.

Term of the new deal are:

Issuer: Medicis Pharmaceutical Corp.

Amount: $350 million

Lead Manager: Deutsche Bank Securities

Maturity Date: June 15, 2032

Coupon: 2.5%

Issue Price: par

Yield-to-maturity: 2.5%

Conversion Premium: 25%

Conversion Price: $58.10

Conversion Ratio: 17.212

Call: non-callable for five years

Put: in years five, 10 and 15

Contingent Conversion: 110% trigger

Contingent Payment: 110% trigger

Settlement Date: June 3

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