By Abigail W. Adams
Portland, Me., Jan. 24 – Insmed, Inc. priced an upsized $400 million in seven-year convertible notes after the market close Tuesday with a coupon of 1.75%, at the rich end of talk, and an initial conversion premium of 35%, richer than talk.
Price talk had been for a coupon of 1.75% to 2.25% and an initial conversion premium of 27.5% to 32.5%, according to a market source.
Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and Leerink Partners LLC were joint bookrunners for the registered deal, which carries an upsized greenshoe of $50 million.
The initial size of the deal was $300 million with a greenshoe of $45 million.
The notes are non-callable for four years, then provisionally callable subject to a 130% hurdle, according to the term sheet.
There is a contingent conversion until Oct. 15, 2024, according to the preliminary prospectus. The notes are convertible after March 31, 2018 if the sales price of stock is equal to or greater than 130% of the conversion price for 20 out of 30 consecutive trading days.
The notes may also be converted prior to Oct. 15, 2024 in the five business days following a consecutive five-day trading period where the trading price of the notes is less than 98% of the product of the sales price of common stock and the conversion rate, or upon a corporate event.
Conversion will be settled in cash, shares or a combination of both, at the company’s option.
There is takeover protection.
Net proceeds are expected to be $387.3 million, or $435.8 million if the greenshoe is exercised.
Proceeds will be used for the clinical development, regulatory approval, and potential commercial launch of a treatment for nontuberculous mycobacteria lung disease. Insmed hopes to launch the treatment in the United States this year, according to a company release.
Insmed is a Bridgewater, N.J.-based biopharmaceutical company focused on treatments for rare diseases.
| Issuer: | Insmed Inc.
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| Issue: | Convertible bonds
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| Amount: | $400 million
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| Greenshoe: | $50 million
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| Maturity: | Jan. 15, 2025
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| Coupon: | 1.75%
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| Price: | Par
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| Initial conversion premium: | 35%
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| Conversion price: | $39.16
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| Call: | Non-callable until Jan. 15, 2022, then subject to a 130% hurdle
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| Settlement | Cash, share settlement
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| Bookrunners: | Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and Leerink Partners LLC
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| Lead manager: | Stifel, Nicolaus | & Co., Inc.
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| Pricing date: | Jan. 23
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| Settlement: | Jan. 26
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| Distribution: | Off shelf
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| Stock symbol: | Nasdaq: INSM
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| Stock price: | $29.005 at market close Jan. 23
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| Market capitalization: | $2.22 billion
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