Albany Molecular plans $100 million five-year convertibles to yield 2%-2.5%, up 27.5%-32.5%

By Rebecca Melvin

New York, Nov. 19 - Albany Molecular Research Inc. planned to price $100 million of five-year convertible senior notes after the market close Tuesday that were talked to yield 2% to 2.5% with an initial conversion premium of 27.5% to 32.5%, according to a syndicate source.

The Rule 144A offering has a $15 million greenshoe.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were acting as joint-bookrunning managers for the proposed offering.

The non-callable notes mature on Nov. 15, 2018. The notes will be convertible at the option of the holders in certain circumstances and solely into cash.

In connection with the pricing of the notes, Albany Molecular intends to enter into privately negotiated cash convertible note hedge transactions with one or more of the initial purchasers of the notes. The initial strike price of the cash convertible note hedge transactions is expected to be the same as the initial conversion price of the notes.

The cash convertible note hedge transactions are expected to offset cash payments due upon conversion of the notes in excess of the principal amount.

A portion of the proceeds will be used to pay the cost of the cash convertible note hedge transactions. Remaining proceeds will be used for working capital and other general corporate purposes, including funding possible acquisitions of, or investments in, complementary businesses, products, services, technologies and capital expenditures.

Albany, N.Y.-based Albany Molecular is a drug discovery services and manufacturing company.

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