Dendreon to price $500 million five-year convertibles to yield 2.375%-2.875%, up 40%-45%

By Rebecca Melvin

New York, Jan. 13 - Dendreon Corp. plans to price $500 million of five-year convertible bonds ahead of the market open on Friday that were talked to yield 2.375% to 2.875% with an initial conversion premium of 40% to 45%, according to a syndicate source.

The registered, off-the-shelf deal, which launched after the market close on Thursday, has a $75 million greenshoe and was being sold via bookrunner J.P. Morgan Securities LLC.

The convertibles are non-callable for life.

Proceeds are earmarked to fund investment in the company's manufacturing facilities, including construction of a new immunotherapy manufacturing facility in Europe, and expenses associated with increasing capacity at its existing facilities in Morris Plains, N.J., Atlanta and Orange County, Calif., as well as covering expenses associated with pursuing non-U.S. marketing approvals of its prostate cancer drug Provenge, and to research other products and to fund general purposes.

Dendreon, a Seattle-based biotechnology company, may also use proceeds to acquire strategic assets.

In connection with the offering, JPMorgan plans to distribute in a registered offering up to $250 million of shares of common stock to facilitate the hedging of notes by buyers of the bonds.

Dendreon will not receive any proceeds from the stock sales.

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