By Kenneth Lim
Boston, Feb. 14 - Amgen Inc. upsized its dual-tranche offering of five- and seven-year convertible bonds to $5 billion from $4 billion and priced it with a coupon at the low end of talk and conversion premiums towards the low end.
The $2.5 billion five-year tranche was priced at 0.125%, up 11%, while the equally sized seven-year tranche was priced at 0.375%, up 10.5%.
Talk on the initial conversion premium was between 10% and 13% for both tranches.
Original talk for the coupon was between 0.125% and 0.625% for the five-year securities, and between 0.375% and 0.875% for the seven-years. During Tuesday's session the coupon was set at the low end of the range for both tranches.
The greenshoe option, $600 million on the initial $4 billion deal, was removed for the enlarged issue.
Morgan Stanley, Merrill Lynch, Citigroup, JP Morgan and Lehman Brothers are the bookrunners for the deal.
A syndicate source said the deal was oversubscribed.
The senior notes, which are priced at par, will be non-callable for life.
The bonds are convertible if the stock price exceeds 130% of the conversion price and are freely convertible one month before maturity. They are protected from takeovers through a make-whole premium and a change-of-control put option.
Amgen, the world's largest biotech company, marketed the offering on Tuesday, with final terms expected after the bell. The Thousand Oaks, Calif., company plans to use $3 billion of the proceeds to buy back shares, and to use the remainder for general purposes and for hedging transactions, which could raise the effective premium to 50% from the company's point of view.
Moody's Investors Service rates the notes A2, while Standard and Poor's rates them A+.
The convertibles will be distributed under Rule 144A.
| Issuer: | Amgen Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Morgan Stanley, Merrill Lynch, Citigroup, JP Morgan and Lehman Brothers
|
| Amount: | $5 billion
|
| Greenshoe: | None
|
| Change of control protection: | Yes
|
| Contingent conversion: | 130%
|
| Call protection: | Non-callable for life
|
| Cash settlement option: | Yes
|
| Pricing date: | Feb. 14, after close
|
| Settlement date: | NA
|
| Symbol: | Nasdaq: AMGN
|
| Distribution: | Rule 144A
|
| Ratings: | Moody's: A2
|
| S&P: A+
|
|
|
| Five-year tranche
|
| Amount: | $2.5 billion
|
| Maturity: | Feb. 1, 2011
|
| Coupon: | 0.125%
|
| Price: | Par
|
| Yield: | 0.125%
|
| Conversion premium: | 11%
|
| Conversion price: | $79.84
|
| Conversion ratio: | 12.52
|
| Price talk: | 0.125%-0.375%, up 10-13%
|
|
|
| Seven-year tranche
|
| Amount: | $2.5 billion
|
| Maturity: | Feb. 1, 2013
|
| Coupon: | 0.375%
|
| Price: | Par
|
| Yield: | 0.375%
|
| Conversion premium: | 10.5%
|
| Conversion price: | $79.48
|
| Conversion ratio: | 12.58
|
| Price talk: | 0.375%-0.875%, up 10-13%
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
