Intercept greenshoe exercised, ups 3.25% convertibles to $460 million

By Marisa Wong

Morgantown, W.Va., July 6 – Intercept Pharmaceuticals Inc. said the underwriters of its recent offering of 3.25% seven-year convertible senior notes exercised their $60 million over-allotment option in full. This brings the total size of the issue to $460 million.

Intercept priced $400 million of the convertible notes before the market open on June 30. The notes were priced at par to yield 3.25% with an initial conversion premium of 32.5%, as previously reported.

The registered deal priced at the midpoint of talk for a 3% to 3.5% coupon and 30% to 35% premium.

The deal was 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.

In connection with the pricing of the notes, Intercept Pharmaceuticals entered into capped call transactions with option counterparties.

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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