Salix greenshoe exercised; 1.5% convertibles lifted to $690 million

By Tali David

Minneapolis, March 16 - Underwriters for Salix Pharmaceuticals, Ltd.'s issue of 1.5% convertible senior notes due 2019 exercised their over-allotment option in full for $90 million more notes, the company announced in a press release.

This increases the size of the issue to $690 million.

Salix sold $600 million of the units on Tuesday. The securities were priced to yield 1.5% with a 35% initial conversion premium.

The issue was initially going to be $500 million in size, and the greenshoe was initially talked at $75 million.

Bank of America Merrill Lynch was the bookrunner.

Goldman Sachs & Co., Jefferies & Co., JMP Securities LLC, Piper Jaffray & Co., RBC Capital Markets LLC and Roth Capital Partners were the co-managers.

As previously reported, proceeds will be used to repurchase up to $75 million of common stock, to repurchase the company's 5.5% convertible bond due 2028 from a holder as well as to make additional purchases of the convertible issue at similar prices and to pay the cost of the call spread.

Based in Raleigh, N.C., Salix makes and markets prescription pharmaceuticals for the treatment of gastrointestinal diseases.

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