By Angela McDaniels
Tacoma, Wash., March 4 - Cell Therapeutics, Inc. priced $51.66 million of four-year convertible senior notes at par to yield 9%, according to a 424B5 filing with the Securities and Exchange Commission.
The conversion ratio is 709.22 shares of common stock per $1,000 principal amount of notes. This equals an initial conversion price of $1.41 per share, which is a 10% premium to the company's closing share price of $1.28 (Nasdaq: CTIC) on Monday.
The notes feature a make-whole provision. Upon conversion, holders will receive $270 per $1,000 principal amount of notes, less any interest paid before conversion.
Beginning March 4, 2009, the notes will be automatically converted if Cell Therapeutics' stock trades at $2.12 or above for 20 days within any 30-day trading period.
The company also issued warrants to purchase 7,326,950 shares of common stock at $1.41 per share.
Rodman & Renshaw, LLC was the agent for the direct placement.
Proceeds will be used for general corporate purposes.
The Seattle-based developer of cancer treatments also announced that a "substantial number" of holders of its series A, series B and series C 3% convertible preferred stock and series D 7% convertible preferred stock have converted their preferred shares into common stock, leaving $13.1 million of the preferreds outstanding.
The company paid a total of $16.2 million in cash to the holders to induce the conversions, according to a news release.
| Issuer: | Cell Therapeutics, Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $51,655,000
|
| Maturity: | March 4, 2012
|
| Coupon: | 9%
|
| Price: | Par
|
| Yield: | 9%
|
| Conversion premium: | 10%
|
| Conversion price: | $1.41
|
| Conversion ratio: | 709.22
|
| Warrants: | For 7,326,950 shares
|
| Warrant strike price: | $1.41
|
| Agent: | Rodman & Renshaw, LLC
|
| Pricing date: | March 3
|
| Settlement date: | March 4
|
| Stock symbol: | Nasdaq: CTIC
|
| Stock price: | $1.28 at close March 3
|
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