By Rebecca Melvin
New York, Nov. 14 – Halozyme Therapeutics Inc. priced $400 million of five-year convertible notes at par to yield 1.25% with an initial conversion premium of 35%, according to a syndicate source on Thursday.
Pricing of the notes came at the midpoint of talk for a 1% to 1.5% coupon and at the low end of 35% to 40% premium talk.
The Rule 144A deal has a $60 million greenshoe and was sold via joint bookrunners BofA Securities Inc. and Evercore.
The notes are non-callable for three years and then provisionally callable at a price trigger of 130%. There are no puts. They have contingent conversion at a trigger of 130%.
The net-share settled notes have takeover protection via a make-whole adjustment premium delivered upon conversion as incremental shares; and there is full dividend protection via conversion ratio adjustment.
Up to $200 million of the proceeds from the notes will be used to repurchase shares of the company’s common stock concurrently with, or shortly after, the pricing of the notes. Remaining proceeds are earmarked for general corporate purposes, including share repurchases subsequent to the offering, working capital and about $26.1 million will be used for retiring debt under the company’s loan agreement with Oxford Finance and Silicon Valley Bank.
San Diego-based Halozyme is a biotechnology company developing products for diabetes, cancer, dermatology and drug delivery markets.
| Issuer: | Halozyme Therapeutics Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $400 million
|
| Greenshoe: | $60 million
|
| Maturity: | Dec. 1, 2024
|
| Bookrunners: | BofA Securities Inc. and Evercore
|
| Co-managers: | Cantor Fitzgerald and JMP Securities
|
| Coupon: | 1.25%
|
| Price: | Par
|
| Yield: | 1.25%
|
| Conversion premium: | 35%
|
| Conversion price: | $23.85
|
| Conversion ratio: | 41.9208
|
| Calls: | Non-callable for three years, then provisionally callable at 130% price hurdle
|
| Puts: | No puts
|
| Dividend protection: | Yes, via conversion ratio adjustment
|
| Net share settlement: | Yes
|
| Contingent conversion: | Yes, at 130%
|
| Pricing date: | Nov. 13
|
| Settlement date: | Nov. 18
|
| Distribution: | Rule 144A
|
| Price talk: | 1%-1.5%, up 35%-40%
|
| Stock symbol: | Nasdaq: HALO
|
| Stock reference price: | $17.67
|
| Market capitalization: | $2.69 billion
|
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