Cerevel greenshoe lifts 2.5% convertibles due 2027 to $345 million

By Marisa Wong

Los Angeles, Aug. 16 – The underwriters of Cerevel Therapeutics Holdings Inc.’s 2.5% convertible notes exercised their $45 million over-allotment option in full, increasing the total size of the deal to $345 million, according to an 8-K filing with the Securities and Exchange Commission.

Cerevel priced an upsized $300 million of the five-year convertible notes after the market close on Aug. 11 at par to yield 2.5% with an initial conversion premium of 32.5%, as previously reported.

Pricing came at the rich end of tightened talk for a coupon of 2.5% to 2.75% and on top of talk for an initial conversion premium of 32.5%, according to a market source.

Initial talk was for a coupon of 2.75% to 3.25% and an initial conversion premium of 27.5% to 32.5%.

Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Jefferies LLC and Evercore Group LLC were bookrunners for the Rule 144A offering.

The initial size of the deal was $250 million with a greenshoe of $37.5 million.

The notes are non-callable until Aug. 20, 2025 and then subject to a 130% hurdle.

They are putable upon a fundamental change.

The notes will be settled in cash, shares or a combination of both at the company’s option.

Proceeds will be used to support the development of the products in its pipeline and for general corporate purposes.

Cerevel is a Cambridge, Mass.-based biopharmaceutical company focused on neurological diseases.

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