Amgen $2.5 billion (proceeds) convertibles talked at 1.0-1.25% yield, up 40-45%

By Ronda Fears

Nashville, Tenn., Feb. 21 - Amgen Inc. was in the overnight Rule 144A market pitching $2.5 billion proceeds of 30-year zero-coupon convertible senior notes with price talk of a 1.0% to 1.25% yield-to-maturity and a 40% to 45% initial conversion premium. Merrill Lynch & Co. is sole lead manager of the deal.

The issue will be non-callable for five years with puts in years three, five, 10 and 15. There is a $300 million greenshoe.

Thousand Oaks, Calif.-based Amgen expects to use proceeds to buyback of approximately $650 million of its common stock and for general corporate purposes, including acquisitions, additional share repurchases, capital expenditures and working capital. The biotech firm is in the process of a $16 billion acquisition of Immunex, including a payment of about $2.5 billion in cash. The deal is expected to close in the second half of the year.

Amgen shares closed down $1.36 to $57.59.

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