Amicus Therapeutics to sell $225 million seven-year convertible notes at 2.75%-3.25%, up 25%-30%

By Stephanie N. Rotondo

Seattle, Dec. 14 – Amicus Therapeutics Inc. plans to sell $225 million of convertible senior notes due 2023, the company said in a press release on Wednesday.

The issue is talked with a 2.75% to 3.25% yield and an initial conversion premium of 25% to 30%, according to a market source.

Goldman Sachs & Co. and J.P. Morgan Securities LLC are the lead bookrunners of the Rule 144A offering. BofA Merrill Lynch and Leerink Partners are also participating.

The deal will include a $25 million over-allotment option.

Conversions will be settled with common stock, cash or a combination thereof, at the company’s option.

The convertibles become provisionally callable after four years if the stock price hits a 130% price hurdle.

Amicus expects to enter into privately negotiated capped call transactions with one or more financial institutions, possibly including initial purchasers or their affiliates. The initial hedging is expected to result in the option counterparties entering into derivative transactions. The former action could result in a dilution of the company’s shares, though the derivatives transactions may reduce that impact.

Proceeds from the deal will be used, in part, to fund the capped call transactions. Additionally, the company plans to use the funds to refinance existing unsecured debt and for general corporate purposes.

Amicus is a Cranbury, N.J.-based biotechnology company focused on rare and orphan diseases.

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