Cubist to price $275 million of 7-year convertibles, talked at 2.25%-2.75%, up 25%-30%

By Kenneth Lim

Boston, May 30 - Cubist Pharmaceuticals Inc. plans to price on Wednesday after the market closes $275 million of seven-year convertible subordinated notes.

Talk for the deal puts the coupon at 2.25% to 2.75% and the initial conversion premium at 25% to 30%.

The convertibles will be offered at par. There is an over-allotment option for a further $41.25 million.

Goldman Sachs & Co. is the bookrunner of the registered off-the-shelf deal.

The convertibles will be non-callable for the first five years, and callable after that if Cubist stock exceeds 150% of the conversion price. There are no put options.

There will be standard dividend and takeover protection.

Cubist, a Lexington, Mass.-based biopharmaceutical company, said it will use the proceeds of the deal to redeem its outstanding $165 million of 5.5% convertibles due 2008. Any remaining proceeds will be used to market Cubist's intravenous antibiotic drug Cubicin, to build the company's product pipeline and for working capital.

Cubist stock closed at $26.03 on Tuesday, up 1.88% or 48 cents, before the offering was announced.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.