Nashville, Feb. 26 - MGI Pharma Inc. sold an upsized $225 million in proceeds of 20-year discount cash-to-zero convertible notes at 74.762 for a yield to maturity of 2.25% and a 30% initial conversion premium via sole bookrunner Merrill Lynch & Co.
The Rule 144A deal, boosted from $200 million, sold at the middle of yield talk of 2.0% to 2.5% and at the cheap end of premium guidance of 30% to 35%.
A cash coupon will be paid for seven years at 2.25% on the issue price, or 1.6821% on the face amount, with the first six interest payments collateralized with U.S. Treasuries.
Holders will have full dividend protection via a conversion ratio adjustment.
The Minneapolis-based biopharmaceutical firm, which focuses on cancer treatments, said that after the Treasury securities are bought, remaining proceeds would be used to continue its business development, including potential acquisitions, and for general corporate purposes.
Pending such uses, the company intends to invest proceeds in interest bearing, marketable securities.
Terms of the deal are:
| Issuer: | MGI Pharma Inc.
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| Issue: | Convertible senior subordinated notes
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| Bookrunners: | Merrill Lynch & Co.
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| Co-managers: | Banc of America Securities, UBS Investment Bank and Piper Jaffray
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| Amount: | $225 million proceeds, upped from $200 million proceeds
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| Greenshoe: | $35 million proceeds, upped from $30 million proceeds
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| Maturity: | March 2, 2024
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| Coupon: | 2.25% for 7 years on issue price, or 1.6821% on the face amount, then 0% accreting
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| Price: | 74.762
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| Yield to maturity: | 2.25%
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| Conversion premium: | 30%
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| Conversion price: | $62.92
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| Conversion ratio: | 11.8821
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| Contingent conversion: | 120%
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| Call: | Non-callable for 3 years
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| Put: | In years 7, 10 and 15
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| Price talk: | 2.0-2.5%, up 30-35%
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| Pricing date: | Feb. 25, after the close
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| Settlement date: | March 2
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| Distribution: | Rule 144A
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