New Issue: Cephalon upsized $500 million convertibles at 2.5% yield, up 17%

By Ronda Fears

Nashville, Tenn., Dec. 6 - Cephalon Inc. sold $500 million of five-year convertible subordinated notes at par to yield 2.5% with a 17% initial conversion premium. Credit Suisse First Boston was sole lead manager of the Rule 144A deal that sold at the aggressive end of revised yield price talk that put the coupon between 2.5% and 2.75%, which was tightened before pricing from original talk of a 2.75% to 3.25% coupon. The premium also came at the aggressive end of guidance , but within the original range of 12% to 17%. The deal also was upsized from $300 million.

West Chester, Pa.-based Cephalon said it intend to use proceeds to fund a portion of the $450 million cash purchase price for the French pharmaceutical company Group Lafon.

Terms of the new deal are:

Issuer: Cephalon Inc.

Amount: $500 million, upped from $300 million

Greenshoe: $100 million, upped from $75 million

Lead Manager: Credit Suisse First Boston

Maturity Date: Dec. 15, 2006

Coupon: 2.5%

Issue Price: par

Yield: 2.5%

Conversion Premium: 17%

Conversion Price: $81.00

Conversion Ratio: 12.34567

Call: non-callable for three years

Settlement Date: Dec. 11

End

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