By Evan Weinberger
New York, July 11 - SonoSite, Inc. priced $200 million in convertible senior notes due 2014 with a 3.75% coupon and an initial conversion premium of 22% late Tuesday.
The deal was increased from $150 million. It came in at the cheap end of coupon talk, which was 3.625% to 4.125%, and at the middle of conversion premium talk of 19% to 24%.
JP Morgan is the bookrunner and Piper Jaffray and Savvian are co-managers of the registered offering. There is a $25 million over-allotment option.
The bonds were issued at par.
The bonds have an initial conversion rate of 26.1792 and a conversion price of $38.20. There is a contingent conversion feature.
There are no call or put options.
Holders will receive cash upon conversion equal to the conversion price. Any value above par will be settled in SonoSite common stock.
SonoSite is a Bothell, Wash.-based maker of ultrasound systems. The company plans to use the proceeds of the bonds for acquisitions of complementary businesses or product lines. Any net proceeds not used for acquisitions will be used for general corporate purposes. SonoSite also plans to use proceeds to enter into a convertible note hedge transaction to cover 48% of the notes to prevent the dilution of SonoSite common stock. The hedging will raise the effective conversion premium from the company's point of view to 50%.
Issuer: SonoSite, Inc.
Issue: Convertible senior notes
Amount: $200 million
Greenshoe: $25 million
Maturity: July 15, 2014
Coupon: 3.75%
Price: Par
Yield: 3.75%
Conversion premium: 22%
Conversion price: $38.20
| Conversion ratio: | 26.1792
|
| Call: | No
|
| Puts: | No
|
| Bookrunner: | JP Morgan
|
| Co-managers: | Piper Jaffray, Savvian
|
| Pricing date: | July 11, before open
|
| Settlement: | July 16
|
| Talk: | 3.625%-4.125% coupon, 19%-24% conversion premium
|
| Distribution: | Registered
|
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