By Rebecca Melvin
New York, Nov. 8 – Cytokinetics Inc. priced an upsized $120 million of seven-year convertible senior notes on Thursday at par to yield 4% with an initial conversion premium of 27.5%, according to term sheet filed with the Securities and Exchange Commission.
The deal was initially talked at $100 million in size. There is also a greenshoe for $18 million of notes, which was increased from $15 million.
Pricing came at the cheap end of talk, which was for a 3.5% to 4% coupon and a 27.5% to 32.5% initial conversion premium.
The notes are non-callable for four years and then provisionally callable if shares exceed 130% of the conversion price.
Morgan Stanley & Co. LLC and Mizuho Securities USA Inc. are joint bookrunners, and JMP Securities LLC is acting as lead manager of the Securities and Exchange Commission-registered deal.
The proceeds of the notes will fund drug development and go toward working capital and other general corporate purposes, including tenant improvement of a new facility. In addition, Cytokinetics plans to use a portion of the proceeds to pay the cost of a capped call transaction. The cap price of the capped call transaction will initially be $14.07 per share, which represents an initial conversion premium of approximately 70% from the issuer’s perspective.
The biopharmaceutical company is based in South San Francisco, Calif.
| Issuer: | Cytokinetics Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $120 million, upsized from $100 million
|
| Greenshoe: | $18 million, upsized from $15 million
|
| Maturity: | Nov. 15, 2026
|
| Bookrunners: | Morgan Stanley & Co. LLC and Mizuho Securities USA LLC
|
| Lead manager: | JMP Securities LLC
|
| Co-manager: | H.C. Wainwright & Co. LLC
|
| Coupon: | 4%
|
| Price: | Par
|
| Yield: | 4%
|
| Initial conversion premium: | 27.5%
|
| Initial conversion price: | $10.55
|
| Initial conversion ratio: | 94.7811
|
| Takeover protection: | Yes, via make-whole table
|
| Calls: | Non-callable until Nov. 20, 2023, then provisionally callable at 130%
|
| Capped call transactions: | Yes, cap price of $14.07
|
| Pricing date: | Nov. 7
|
| Settlement date: | Nov. 13
|
| Distribution: | SEC registered
|
| Price talk: | 3.5%-4%, up 27.5%-32.5%
|
| Stock symbol: | Nasdaq: CYTK
|
| Stock price: | $8.275
|
| Market capitalization: | $470.07 million
|
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