Isis Pharmaceuticals to price $425 million seven-year convertibles to yield 0.5%-1%, up 30%-35%

By Rebecca Melvin

New York, Nov. 10 – Isis Pharmaceuticals Inc. launched a $425 million offering of seven-year convertible notes late Monday that was seen pricing late Tuesday and was talked to yield a coupon of 0.5% to 1% with an initial conversion premium of 30% to 35%, according to a market source.

The Rule 144A deal has a $63.75 million over-allotment option and was being sold via bookrunners J.P. Morgan Securities LLC, Stifel Nicolaus Weisel and BMO Capital Markets.

The notes are non-callable for life with no puts. There is takeover and dividend protection.

The deal is coming with a call spread.

Proceeds will be used to repurchase up to $140 million of its outstanding 2.75% convertible senior notes due 2019 through individually negotiated transactions with holders, with remaining proceeds to develop select drugs in its pipeline, to develop and potentially commercialize the drugs in its lipid franchise and for general corporate and working capital purposes.

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

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