InterMune $150 million mandatory convertible talked at 0.0-0.5%, up 15-20%

Nashville, Feb. 9 - InterMune Inc. launched $150 million of seven-year convertibles talked to yield 0% to 0.5% with a 15% to 20% initial conversion premium with pricing slated after Tuesday's close. Proceeds are earmarked to possibly take out its old 5.75% convertible due 2006 by third quarter.

Morgan Stanley & Co. is sole bookrunner of the Rule 144A deal. Banc of America Securities is joint lead manager.

The senior notes will be non-callable. Settlement at maturity is in cash and/or stock, at the company's option.

Holders will have full dividend protection.

There is a $20 million greenshoe available.

Brisbane, Calif.-based InterMune, a biotech concern focused on treatments for pulmonary, infectious and hepatic diseases, said proceeds would be used to redeem its outstanding 5.75% convertible subordinated notes due 2006 before and/or during third quarter. But, the company also said that it may determine not to purchase or redeem any or all of these outstanding notes. If not, proceeds will be used for general corporate purposes.

InterMune's 5.75% convertible was quoted up 3.375 points to 101.375 bid, 102.375 offered. The underlying common stock closed Monday up 31 cents, or 1.63%, to $19.35. In after-hours trading, the stock was down 70 cents, or 3.62%.

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