Isis Pharmaceuticals offers $175 million seven-year convertibles at 3%-3.5%, up 27.5%-32.5%

By Rebecca Melvin

New York, Aug. 6 - Isis Pharmaceuticals Inc. launched late Monday an offering of $175 million of seven-year convertible notes that was seen pricing late Tuesday and was talked to yield a coupon of 3% to 3.5% with an initial conversion premium of 27.5% to 32.5%, according to a market source.

The Rule 144A deal has a $26.25 million over-allotment option and is being sold via bookrunners Barclays, Goldman Sachs & Co. and J.P. Morgan Securities LLC.

The notes are non-callable for four years and then are provisionally callable subject to a 130% price hurdle. There are no puts, but the paper has takeover and dividend protection.

Proceeds will be used to repay its 2.625% convertibles due 2027, which traded in the secondary market on Monday at 105.75 bid, 106.75 offered versus an underlying share price of $13.15.

Isis is a Carlsbad, Calif.-based drug maker.

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