By Angela McDaniels
Tacoma, Wash., Oct. 9 – Anacor Pharmaceuticals Inc. priced $75 million of 2% seven-year convertible senior notes after the market close Thursday with a 35% initial conversion premium, according to a company news release.
The convertibles were upsized from $70 million.
The offering was talked to yield 2.5% to 3% with an initial conversion premium of 30% to 35%, according to a syndicate source.
The Rule 144A deal has a $7.5 million greenshoe.
Goldman Sachs & Co. is the bookrunner. Jefferies LLC is the lead manager.
Conversions can be settled in cash, shares or a combination of cash and shares at the issuer’s option.
The notes are non-callable until Oct. 15, 2018 and then are provisionally callable if the company’s share price exceeds 130% of the conversion price for at least 20 trading days out of 30.
Some funds affiliated with Venrock Associates, one of Anacor’s affiliates, have agreed to purchase $8 million of the notes in a concurrent private placement.
Anacor plans to use a portion of the proceeds to repay in full the debt under its loan and security agreement, of which $30 million was outstanding as of June 30, and to use the remaining proceeds for general corporate purposes. In connection with the debt repayment, Anacor will pay a 2% prepayment fee.
Palo Alto, Calif.-based Anacor is a biopharmaceutical company focused on novel small-molecule therapeutics derived from its boron chemistry platform.
| Issuer: | Anacor Pharmaceuticals Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $75 million
|
| Greenshoe: | $7.5 million
|
| Maturity: | Oct. 15, 2021
|
| Coupon: | 2%
|
| Initial conversion premium: | 35%
|
| Conversion price: | $31.05
|
| Conversion ratio: | 32.2061
|
| Call option: | Non-callable until Oct. 15, 2018, then provisionally callable subject to 130% hurdle
|
| Put option: | At par upon a change of control
|
| Bookrunner: | Goldman Sachs & Co.
|
| Lead manager: | Jefferies LLC
|
| Co-managers: | Cowen and Co., LLC and Wedbush Securities Inc.
|
| Distribution: | Rule 144A
|
| Pricing date: | Oct. 9
|
| Settlement date: | Oct. 16
|
| Stock symbol: | Nasdaq: ANAC
|
| Market capitalization: | $23.00 at close Oct. 9
|
| Price talk: | 2.5%-3%, up 30%-35%
|
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