By Rebecca Melvin
New York, Aug. 13 – Ligand Pharmaceuticals Inc. priced $225 million of five-year convertible senior notes after the market close on Tuesday to yield 0.75% with an initial conversion premium of 35%, according to a news release.
Pricing of the Rule 144A deal came at the midpoint of talk, which was for 0.5% to 1% yield and 32.5% to 37.5% premium.
BofA Merrill Lynch and Deutsche Bank Securities LLC were the joint bookrunners for the offering for which there is a $20 million greenshoe.
Concurrently with the pricing of the notes, the company repurchased $40 million shares of common stock. The company also entered into certain convertible note hedge and warrant transactions, or a call spread. The strike price on the warrants is $125.08, which boosts the initial conversion premium from the issuer’s perspective to 125%.
Proceeds of the bond issue are being used for the share repurchases, with remaining proceeds earmarked for additional share repurchases of up to a total of $200 million, and $35 million is being used to fund the net cost of the call spread.
The notes are non-callable with no puts.
San Diego, Calif.-based Ligand is a biopharmaceutical company.
| Issuer: | Ligand Pharmaceuticals Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $225 million
|
| Greenshoe: | $20 million
|
| Maturity: | Aug. 15, 2019
|
| Bookrunners: | BofA Merrill Lynch, Deutsche Bank Securities LLC
|
| Coupon: | 0.75%
|
| Price: | Par
|
| Yield: | 0.75%
|
| Conversion premium: | 35%
|
| Conversion price: | $75.05
|
| Conversion ratio: | 13.3251 shares
|
| Calls: | Non-callable
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Call spread: | Yes, warrant strike price is $125.08, boosting premium from the issuer’s perspective to 125%
|
| Pricing date: | Aug. 12
|
| Settlement date: | Aug. 18
|
| Stock symbol: | Nasdaq: LGND
|
| Stock price: | $55.59 as of close Aug. 12
|
| Distribution: | Rule 144A
|
| Market capitalization: | $1.15 billion
|
| Price talk: | 0.5%-1%, up 32.5%-37.5%
|
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