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MedImmune launches $1 billion of convertibles in two tranches
By Rebecca Melvin
Princeton, N.J., June 21 - MedImmune Inc. plans to price $1 billion of convertible bonds in two $500 million tranches. Pricing is expected to occur Thursday after the close, according to syndicate sources.
Price talk on the first five-year tranche is for a coupon of 0.875% to 1.375% with an initial conversion premium of 20% to 25%.
Talk on the second tranche, which is a seven-year bullet, is for a coupon of 1.125% to 1.635% with an initial conversion premium of 20% to 25%.
Neither tranche has any calls or puts.
The Rule 144A deal is being sold by joint bookrunners Merrill Lynch and UBS Investment Bank, with UBS stabilizing.
There is a planned over-allotment option for up to an additional $150 million of bonds, or $75 million for each tranche.
MedImmune expects about half of the proceeds to go to repurchase its existing 1% convertible senior notes that come due July 15. In addition, MedImmune expects to use up to $150 million to buy back shares of common stock concurrently with the offering of the notes.
MedImmune also expects to enter into convertible note hedge transactions with certain of the initial purchasers, their affiliates or other dealers.
Remaining proceeds will be added to working capital and used for general corporate purposes, including potential acquisitions, in-licensing and collaboration opportunities, and additional share repurchases, pursuant to the company's recently announced $500 million share buyback program.
Gaithersburg, Md.-based MedImmune (Nasdaq: MEDI) is a biotechnology company focused on the treatment of infectious and inflammatory diseases and cancer.
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