Ligand plans $225 million five-year convertibles to yield 0.5%-1%, up 32.5%-37.5%

By Rebecca Melvin

New York, Aug. 11 – Ligand Pharmaceuticals Inc. plans to price $225 million of five-year convertibles after the market close on Tuesday that were talked to yield 0.5% to 1% with an initial conversion premium of 32.5% to 37.5%, according to a syndicate source.

The Rule 144A offering has a $20 million greenshoe and was being sold via joint bookrunners BofA Merrill Lynch and Deutsche Bank Securities.

The company has also authorized a $200 million share repurchase program over the next 12 months.

Proceeds of the bond issue will be used to repurchase up to $45 million of shares of common stock concurrently with the bond offering, with remaining proceeds for additional share repurchases of up to a total of $200 million. Proceeds will also be used to fund the net cost of a call spread, or convertible note hedge and warrant transactions also planned in connection with the deal.

The notes are non-callable with no puts.

San Diego, Calif.-based Ligand is a biopharmaceutical company.

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