By Rebecca Melvin
New York, Jan. 16 - InterMune Inc. priced an upsized $105 million of five-year convertible bonds at par to yield 2.5% with an initial conversion premium of 30%, according to a term sheet.
The registered, off-the-shelf deal, which was initially talked at $85 million in size, priced concurrently with 13.5 million shares of common stock at $9.90 per share. The share offering was upsized from an initially talked 12.5 million shares.
Pricing of the notes came beyond the tight end of talk for the coupon, which was 3.125% to 3.625%, and at the tight end of 25% to 30% premium talk.
There are over-allotment options for up to an additional $15.75 million of notes and up to an additional 2.025 million of common shares.
Goldman Sachs & Co. and J.P. Morgan Securities LLC were the joint bookrunners.
The notes are non-callable until June 20, 2015 and then are provisionally callable if the price of the common stock exceeds 130% of the conversion price for at least 20 days in a 30-day trading period.
If the notes are called, the redemption price will 100% of the principal amount of notes plus accrued and unpaid interest.
There is standard takeover and dividend protection.
Proceeds from both offerings will be used to repurchase early or at maturity the company's outstanding 5% convertible senior notes due 2015.
The company has already received commitments from holders to repurchase about $50 million of notes.
Proceeds may also be used to fund commercialization of Esbriet, to fund InterMune's Ascend trial, and for general corporate purposes, which may include research and development and working capital.
Brisbane, Calif.-based InterMune is a biotech concern focused on treatments for pulmonary, infectious and hepatic diseases.
| Issuer: | InterMune Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $105 million, upsized from $85 million
|
| Maturity: | Dec. 15, 2017
|
| Concurrent issue: | $133.65 million of ordinary shares at $9.90 per share, upsized from $123.75 million
|
| Greenshoe: | $15.75 million of notes
|
| Bookrunners: | Goldman Sachs & Co., J.P. Morgan Securities LLC
|
| Co-managers: | Canaccord Genuity Inc., Leerink Swann LLC, Wells Fargo Securities, LLC, William Blair & Co. LLC
|
| Coupon: | 2.5%
|
| Price: | Par
|
| Yield: | 2.5%
|
| Initial conversion premium: | 30%
|
| Initial conversion price: | $12.87 per share
|
| Initial conversion ratio: | 77.7001 shares
|
| Price talk: | 3.125%-3.625%, up 25%-30%
|
| Pricing date: | Jan. 15
|
| Settlement date: | Jan. 22
|
| Stock symbol: | Nasdaq: ITMN
|
| Reference stock price: | $9.90
|
| Share price: | $10.04 as of close Jan.15
|
| Distribution: | Registered, off the shelf
|
| Market capitalization: | $676.65 million
|
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