Lannett greenshoe ups 4.5% seven-year convertibles to $86.25 million

By Wendy Van Sickle

Columbus, Ohio, Sept. 27 – The underwriter for Lannett Co. Inc.’s 4.5% convertible senior notes due Oct. 1, 2026 fully exercised their $11.25 million greenshoe, increasing the total deal size to $86.25 million, according to an 8-K filing with the Securities and Exchange Commission.

The company priced $75 million of the convertibles on Wednesday with a 10% initial conversion premium, as previously reported.

The Rule 144A deal 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.

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