By Abigail W. Adams
Portland, Me., Aug. 8 – Ironwood Pharmaceuticals, Inc. priced an upsized $175 million tranche of five-year convertible notes and an upsized $175 million tranche of seven-year convertible notes at the midpoint of talk prior to the market open on Thursday, according to a company news release.
The five-year tranche priced at par with a coupon of 0.75% and an initial conversion premium of 37.5%.
Price talk had been for a coupon of 0.625% to 1.125% and an initial conversion premium of 35% to 40%.
The seven-year tranche priced at par with a coupon of 1.5% and an initial conversion premium of 37.5%.
Price talk had been for a coupon of 1.25% to 1.75% and an initial conversion premium of 35% to 40%.
J.P. Morgan Securities LLC was the bookrunner for the Rule 144A offering with each tranche carrying a greenshoe of $25 million.
The initial size of the tranches was $165 million.
The notes are non-callable. They have standard dividend and takeover protection.
In connection with the pricing of the notes, Ironwood will enter into capped call transactions with a cap price of $17.05 per share, representing a premium of 75% over the last reported sales price of stock.
Net proceeds are expected to be $341 million or $390 million if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the call spread, to redeem its outstanding 8.375% senior notes due 2026 and to repurchase approximately $215 million in principal amount of its outstanding 2.25% convertible notes due 2022.
Remaining proceeds will be used for general corporate purposes.
Ironwood is a Cambridge, Mass-based pharmaceutical company focused on developing treatments for gastrointestinal diseases.
| Issuer: | Ironwood Pharmaceuticals, Inc.
|
| Securities: | Convertible senior notes
|
| Bookrunner: | J.P. Morgan Securities LLC
|
| Pricing date: | Aug. 8
|
| Distribution: | Rule 144A
|
| Stock symbol: | Nasdaq: IRWD
|
| Stock price: | $9.74 at market close Aug. 7
|
| Market capitalization: | $1.52 billion
|
|
|
| 2024 notes
|
| Amount: | $175 million
|
| Greenshoe: | $25 million
|
| Maturity: | June 15, 2024
|
| Coupon: | 0.75%
|
| Price: | Par
|
| Yield: | 0.75%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $13.39
|
| Conversion rate: | 74.6687
|
| Call options: | None
|
| Talk: | Coupon of 0.625% to 1.125% and initial conversion premium of 35% to 40%
|
|
|
| 2026 notes
|
| Amount: | $175 million
|
| Greenshoe: | $25 million
|
| Maturity: | June 15, 2026
|
| Coupon: | 1.5%
|
| Price: | Par
|
| Yield: | 1.5%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $13.39
|
| Conversion rate: | 74.6687
|
| Call options: | None
|
| Talk: | Coupon of 1.25% to 1.75% and initial conversion premium of 35% to 40%
|
|
|
|
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