By Rebecca Melvin
New York, Sept. 25 – Lannett Co. Inc. priced $75 million of 4.5% seven-year convertible senior notes, with a 10% initial conversion premium, according to a company news release on Wednesday.
There is a greenshoe of $11.25 million for the Rule 144A deal, which was sold by bookrunner Credit Suisse Securities (USA) LLC.
The notes are non-callable for four years and then provisionally callable at a price trigger of 130%. They will be settled in shares at maturity.
In connection with the pricing of the notes, the company entered into a capped call transaction with an affiliate of the initial purchaser of the notes. The strike on the capped call is $19.46, which represents a premium of about 40% from the issuer’s perspective.
The proceeds of the offering will be used to reduce outstanding borrowings under the company’s existing term loan A under its existing senior credit facility and to pay the cost of the capped call transaction.
Lannett is a generic drug company based in Philadelphia.
| Issuer: | Lannett Co. Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $75 million
|
| Greenshoe: | $11.25 million
|
| Maturity: | Oct. 1, 2026
|
| Bookrunner: | Credit Suisse Securities (USA) LLC
|
| Coupon: | 4.5%
|
| Conversion premium: | 10%
|
| Conversion price: | $15.29
|
| Conversion rate: | 65.4022
|
| Call options: | Non-callable until Oct. 6, 2023, then provisionally callable at 130% price hurdle
|
| Capped call: | Yes, at $19.46 strike
|
| Pricing date: | Sept. 25
|
| Settlement date: | Sept. 27
|
| Distribution: | Rule 144A
|
| Stock symbol: | NYSE: LCI
|
| Stock price: | $13.90 at market close Sept. 24
|
| Market capitalization: | $469.92 million
|
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