By Paul A. Harris
St. Louis, Feb. 3 - RC Royalty Sub LLC/Alkermes Inc. sold $170 million of 7% secured notes due Jan. 1, 2018 with a 9¾% yield, according to a company news release Wednesday.
Morgan Stanley was involved in the transaction, according to a capital markets source.
The transaction generated $145 million of proceeds.
Interest and principal will be paid solely out of manufacturing and royalty revenues from the manufacture and sale of Risperdal Consta, an antipsychotic approved for the treatment of schizophrenia and marketed by Janssen-Cilag, a wholly owned division of Johnson & Johnson.
Timing of the principal repayment will be based on the revenues received by RC Royalty Sub LLC but will occur no earlier than equally over the 12 quarters between April 1, 2009 and Jan. 1, 2012, subject to certain conditions. The notes, however, may be redeemed at Alkermes' option, subject to the payment of a redemption premium.
Alkermes Inc. is a Cambridge, Mass.-pharmaceutical company that develops products based on sophisticated drug delivery technologies to enhance therapeutic outcomes in major diseases.
| Issuer: | RC Royalty Sub LLC/Alkermes Inc.
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| Face amount: | $170 million
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| Proceeds: | $145 million (approximate)
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| Maturity: | Jan. 1, 2018
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| Security description: | Secured notes
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| Coupon: | 7%
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| Yield: | 9¾%
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| Settlement date: | Feb. 3
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