St. Jude Medical prices $1.2 billion 20-month convertibles at 1.22%, up 20%, greenshoe exercised

By Kenneth Lim

Boston, April 19 - St. Jude Medical Inc. priced a $1.2 billion of 20-month convertible senior unsecured debentures on Thursday after the market closed with a coupon of 1.22% and a 20% initial conversion premium.

The deal came close to the middle of talk which put the coupon at 1% to 1.5% and the initial conversion premium at 17.5% to 22.5%.

Included in the total size is the original $1 billion amount plus the immediately exercised over-allotment option for a further $200 million.

The conversion price is $52.06.

The convertibles were offered at par.

Banc of America is the bookrunner of the Rule 144A offering.

The convertibles are non-callable and may not be put.

There is a contingent conversion trigger at 130% of the conversion price.

The debentures have dividend and takeover protection.

There is a net-share settlement option.

St. Jude Medical, a St. Paul, Minn.-based maker of cardiovascular medical devices, said it will use the proceeds of the deal to repay debt that was incurred in its $700 million stock buyback in February. It will also buy back up to $300 million of its common stock and fund convertible note hedge and warrant transactions that will increase the effective conversion premium from the company's perspective to 40%.

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