Intercept Pharmaceuticals plans $400 million seven-year convertibles to yield 3%-3.5%, up 30%-35%

By Rebecca Melvin

New York, June 29 – Intercept Pharmaceuticals Inc. plans to price $400 million of seven-year convertibles before the market open on Thursday to yield 3% to 3.5% with an initial conversion premium of 30% to 35%, according to market sources.

The registered deal has a $60 million greenshoe and was being sold via joint bookrunners RBC Capital Markets LLC, UBS Investment Bank, BofA Merrill Lynch, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC.

The bonds are non-callable until July 6, 2021 and then are provisionally callable if shares exceed 130% of the conversion price. There are no investor puts besides a takeover protection put. There is also dividend protection.

Settlement will be in cash, shares or a combination of cash and shares. The notes mature July 1, 2023.

Proceeds will be used to fund the purchase of a capped call transaction, for commercialization and continued clinical development of Ocaliva and for general corporate purposes and working capital.

New York-based Intercept is a biopharmaceutical company focused on novel therapeutics to treat non-viral, progressive liver diseases with high unmet medical need.

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