By Kenneth Lim
Boston, April 25 - Cell Therapeutics Inc. on Tuesday priced $33.2 million of five-year convertible senior notes at a coupon of 7.5% with an initial conversion premium of 15%.
The convertibles were offered at par and have a conversion price of $2.09. Cell Therapeutics stock closed at $1.83 on Monday.
Price talk terms were not provided, but market sources said book building took place about two weeks before the final terms were set and most of the interest came from existing investors in Cell Therapeutics.
There is a greenshoe option for a further $5 million.
CRT Capital Group was the bookrunner for the off-the-shelf deal.
Cell Therapeutics concurrently issued another $33.2 million of 7.5% convertible senior notes due 2011 with an initial conversion premium of 15% in exchange for $40.7 million of existing subordinated convertible debt. The existing debt comprises $39.5 million of its outstanding 5.75% convertible senior subordinated notes due 2008 and $1.2 million of its outstanding 5.75% convertible subordinated notes due 2008.
The publicly offered convertibles and those placed in the private exchange offer rank equally.
The convertibles are non-callable for the first three years. If the stock trades above 125% of the conversion price for at least 20 out of 30 trading days then the notes will automatically convert.
The conversion ratio will be adjusted if Cell Therapeutics pays dividends, and the convertibles may be put if there is a change of control.
Cell Therapeutics has taken a negative pledge, and cross default is subject to a $10 million threshold.
Cell Therapeutics, a Seattle-based developer of cancer treatments, said the proceeds from the public offering will be used for general purposes. The company first announced on April 6 that it planned to sell or exchange between $50 million and $100 million of convertible notes.
| Issuer: | Cell Therapeutics Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | CRT Capital Group
|
| Amount: | $33.2 million
|
| Greenshoe: | $5 million
|
| Maturity: | April 30, 2011
|
| Coupon: | 7.5%
|
| Price: | Par
|
| Yield: | 7.5%
|
| Conversion premium: | 15%
|
| Conversion price: | $2.09
|
| Conversion ratio: | 478.519
|
| Dividend protection: | Yes
|
| Takeover protection: | Change of control put
|
| Call protection: | Non-callable 3 years, automatic conversion subject to 125% threshold
|
| Negative pledge: | Yes
|
| Cross default: | Subject to $10 million threshold
|
| Pricing date: | April 25
|
| Settlement date: | April 27
|
| Distribution: | Off shelf
|
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