Innoviva’s $175 million convertibles due 2025 talked at 2.25%-2.75%, up 27.5%-32.5%

By Stephanie N. Rotondo

Seattle, Aug. 1 – Innoviva Inc.’s proposed $175 million offering of convertible senior notes due 2025 is carrying initial price talk for a yield of 2.25% to 2.75% and an initial conversion premium of 27.5% to 32.5%, a market source reported on Tuesday.

The Rule 144A deal was first announced late Monday. Pricing is expected after Tuesday’s close.

Morgan Stanley & Co. LLC and Deutsche Bank Securities Inc. are the bookrunners.

There is a $17.5 million over-allotment option.

Conversion will be settled in cash, common stock or a combination of the two.

The convertibles are non-callable for life.

The transaction is being done as part of the company’s plan to refinance its 9% fixed rate term notes due 2029. Proceeds from the convertibles offering will be used to redeem a portion of the issue on Aug. 15.

The company may also use the funds to purchase common stock via privately negotiated transactions.

Innoviva is a Brisbane, Calif.-based biopharmaceutical company.

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