Biogen completes exchange, cash tender offers for 5.2% notes due 2045

By Taylor Fox

New York, Feb. 16 – Biogen Inc. completed on Tuesday its private offer to exchange any and all of its tendered 5.2% senior notes due 2045 (Cusip: 09062XAD5) for a new series of senior notes due 2051 and cash and its separate offer to purchase tendered notes for cash, according to an 8-K filing with the Securities and Exchange Commission.

An aggregate amount of $624,567,000 of the old notes were tendered and accepted for exchange, and a total of $8,907,000 of old notes were tendered and accepted under the cash offer.

In consideration for the old notes accepted under the exchange offer, Biogen issued $700,731,000 of new notes and made cash payments totaling $151,669,850.28, excluding accrued interest to the settlement date and excluding amounts due in lieu of fractional amounts of new notes.

In consideration for the old notes accepted under the cash offer, Biogen made cash payments totaling $12,087,867.84, excluding accrued interest to the settlement date.

As previously reported, the consideration under each of the offers is $1,357.12 per $1,000 of notes, calculated based on a fixed spread of 115 basis points over the 1.937% reference yield based on the 1.375% U.S Treasury security due Aug. 15, 2050. Pricing was determined at 11 a.m. ET on Feb. 10.

The $1,357.12 consideration per $1,000 principal amount was paid entirely in cash under the tender offer and was paid as $1,122.16 of new notes and $242.84 of cash under the exchange offer.

The offers began on Feb. 4 and expired at 5 p.m. ET Feb. 10. Tenders under guaranteed delivery procedures for each offer were due by 5 p.m. ET on Feb. 12.

All of the old notes accepted for exchange or purchase have been cancelled, leaving $1,116,526,000 of the old notes outstanding. There was $1.75 billion principal amount outstanding at the start of the offers.

Exchange offer

The exchange offer was only being made to noteholders who are qualified institutional buyers under Rule 144A or non-U.S. persons under Rule 902 of the U.S. Securities Act of 1933.

The cash portion of the exchange consideration represents 68% of the premium, the amount by which the total exchange consideration exceeds $1,000 for each $1,000 of old notes. The cash component was increased from 67% of the premium in order to meet a tax condition under the offer, the company previously noted.

The new notes due Feb. 15, 2051 will carry a coupon of 3.25%. Pricing for the new notes was based on the 1.375% U.S Treasury security due Aug. 15, 2050 and a fixed spread of 135 bps.

Biogen also paid interest to but excluding the settlement date and amounts due in lieu of fractional amounts of new notes.

The exchange offer was subject to a number of conditions, two of which could not be waived: the cash offer completion condition or the minimum issue condition. Biogen had to complete the cash tender offer and issue at least $300 million of new notes under the exchange offer.

Tender offer

The cash offer was open only to holders who are not qualified institutional buyers under Rule 144A and are not non-U.S. persons under Rule 902 of the Securities Act.

Biogen also paid interest to but excluding the settlement date in addition to the tender consideration.

The cash offer was conditioned on, among other things, completion of the exchange offer. The exchange offer completion condition could not be waived.

No consents were solicited in connection with the cash offer, the company noted.

Global Bondholder Services Corp. (866 470-3900, 212 430-3774; gbsc-usa.com) is the exchange agent, tender agent and information agent.

The biotechnology company is based in Cambridge, Mass.

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