By Rebecca Melvin
New York, Feb. 12 - AMAG Pharmaceuticals Inc. priced an upsized $175 million of five-year convertibles at par to yield 2.5% with an initial conversion premium of 35%, according to a syndicate source.
The registered, off-the-shelf deal was initially talked at a $150 million base deal. There is also a $25 million greenshoe, which was upsized from $22.5 million.
Pricing came at the midpoint of 2.25% to 2.75% coupon talk and at the rich end of 30% to 35% premium talk.
J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the joint bookrunners.
The notes are non-callable with no puts, except a change-of-control put, and they also have net share settlement and contingent conversion if shares exceed 130% of the conversion price.
In connection with the offering, the company entered into privately negotiated convertible note hedge and warrant transactions, or a call spread, which boosts the initial conversion premium from the issuer's perspective.
A portion of the proceeds will be used to pay the net cost of the call spread. Remaining proceeds will be for working capital and other general corporate purposes, including to fund possible acquisitions or investments in complementary businesses, services or technologies.
Waltham, Mass.-based AMAG is a specialty pharmaceutical company.
| Issuer: | AMAG Pharmaceuticals Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $175 million, upsized from $150 million
|
| Greenshoe: | $25 million, upsized from $22.5 million
|
| Maturity: | Feb. 15, 2019
|
| Bookrunners: | J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC
|
| Co-managers: | Cowen & Co. LLC, Robert W. Baird & Co.
|
| Coupon: | 2.5%
|
| Price: | Par
|
| Yield: | 2.5%
|
| Conversion premium: | 35%
|
| Conversion price: | $27.09
|
| Conversion ratio: | 36.9079 shares
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Net share settlement: | Yes
|
| Contingent conversion: | Yes, at 130%
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Call spread: | Yes
|
| Price talk: | 2.25%-2.75%, up 30%-35%
|
| Pricing date: | Feb. 11
|
| Settlement date: | Feb. 14
|
| Distribution: | Registered, off-the-shelf
|
| Stock symbol: | Nasdaq: AMAG
|
| Stock price: | $21.17 at close Feb. 11
|
| Market capitalization: | $436.38 million
|
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