Mylan to price $400 million seven-year convertibles to yield 2.875%-3.375%, up 20%-25%

By Rebecca Melvin

New York, Sept. 9 - Mylan Inc. plans to price $400 million of seven-year convertible notes after the close Tuesday to yield 2.875% to 3.375% with an initial conversion premium of 20% to 25%, according to a syndicate source.

There is an over-allotment option for an additional $60 million on the Rule 144A offering, which is being sold via joint bookrunners Goldman Sachs & Co. and Merrill Lynch.

The paper is non-callable for life, with no puts. The convertibles will have a contingent conversion feature and will be convertible only into cash.

Mylan will also enter into separate cash settled convertible note hedge and net share settled warrant transactions.

Proceeds will be used to fund the hedge and warrant transactions, to pay down an outstanding Libor plus 250 basis points senior secured revolving credit facility and to pay down senior secured term loan facilities that currently bear interest of Libor plus 300 bps to Libor plus 325 bps.

Mylan is a Canonsburg, Pa.-based maker of generic drugs.

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