AMAG greenshoe lifts 2.5% five-year convertibles to $200 million

By Susanna Moon

Chicago, Feb. 14 - AMAG Pharmaceuticals Inc. underwriters fully exercised the $25 million greenshoe on the company's 2.5% five-year convertibles, bringing the total deal size to $200 million, according to an 8-K filing with the Securities and Exchange Commission.

AMAG priced an upsized $175 million of the convertibles at par on Feb. 12 with an initial conversion premium of 35%, as previously reported by Prospect News.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC were the joint bookrunners.

The registered, off-the-shelf deal was initially talked at a $150 million base deal. The greenshoe was upsized from $22.5 million.

Settlement occurred on Friday.

Pricing came at the midpoint of 2.25% to 2.75% coupon talk and at the rich end of 30% to 35% premium talk.

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.

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