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MedImmune prices $1 billion convertibles: 5-years yield 1.375%, 7-years yield 1.625%, both up 22.5%
New York, June 22 - MedImmune, Inc. priced its $1 billion of convertible senior notes, selling the $500 million five-year tranche to yield 1.375% with a 22.5% initial conversion premium and the $500 million seven-year tranche to yield 1.625%, also with a 22.5% initial conversion premium.
Both yields were at the cheap end of talk while the conversion premium was at the middle of talk on both portions.
Price talk on the five-year tranche was for a coupon of 0.875% to 1.375% with an initial conversion premium of 20% to 25%. Talk on the seven-year piece was for a coupon of 1.125% to 1.625% with an initial conversion premium of 20% to 25%.
There is a greenshoe of $75 million for each tranche.
The conversion price in each case is $33.37 and the conversion ratio 29.9679.
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.
MedImmune said it is entering into convertible note hedge and warrant transactions with two of the underwriters that will effectively increase the conversion price to $47.67 or a 75% premium from the company's point of view. The hedge will cost $121 million beyond the proceeds from selling warrants.
MedImmune said it expects holders of its existing 1% convertible to exercise the put at par on July 17. About $500 million of the proceeds of the new deal will be used to buy back those securities.
MedImmune will use up to $150 million of the proceeds to buy back stock in privately negotiated transactions concurrently with the offering of the new convertibles.
Remaining proceeds will be used for general corporate purposes.
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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