By Abigail W. Adams
Portland, Me., June 18 – GSK Finance No. 3 plc, a subsidiary of GlaxoSmithKline plc, priced $280 million of three-year notes (expected A2/A) exchangeable for Theravance Biopharma Inc. stock after the market close on Wednesday with a coupon of 0%, an initial exchange premium of 35% and a reoffer price of 108.5, according to a company news release.
Pricing came in line with talk for a fixed coupon of 0% and a fixed initial exchange premium of 35% and at the rich end of talk for a reoffer price of 106.5 to 108.5, according to a market source.
Barclays was the bookrunner for the Rule 144A offering.
The notes are non-callable for two years and then subject to a 130% hurdle.
They will be settled in shares, or, in certain circumstances, a combination of cash and shares at the company’s option.
The notes will be exchangeable into all of the 9,644,807 shares of Theravance currently owned by GSK, according to a company press release.
The initial size of the offering was $300 million. However, the final deal size was $280 million due to the lowered market value of GSK’s Theravance shares, according to a market source.
GSK plans to use proceeds for general corporate purposes. Theravance will not receive proceeds from the offering.
GlaxoSmithKline is a Brentford, U.K.-based pharmaceutical company.
Theravance is a San Francisco-based biopharmaceutical company.
| Issuer: | GSK Finance No. 3 plc
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| Securities: | Exchangeable notes
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| Amount: | $280 million
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| Maturity: | June 22, 2023
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| Bookrunner: | Barclays
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| Coupon: | 0%
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| Price: | 108.5
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| Exchange premium: | 35%
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| Exchange price: | $29.0660
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| Exchange rate: | 34.4044
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| Call options: | Non-callable for two years then subject to a 130% hurdle
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| Pricing date: | June 17
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| Settlement date: | June 22
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| Expected ratings: | Moody’s: A2
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| S&P: A
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| Distribution: | Rule 144A
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| Talk: | Fixed coupon of 0%, a fixed initial conversion premium of 35% and a reoffer price of 106.5 to 108.5
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| Stock symbol: | Nasdaq: TBHP
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| Stock price: | $21.5304 VWAP on June 17
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| Market capitalization: | $1.37 billion
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