Ligand talks $650 million five-year convertible notes to yield 0.5% to 1%, up 27.5% to 32.5%

By Abigail W. Adams

Portland, Me., May 16 – Ligand Pharmaceuticals Inc. plans to price $650 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 0.5% to 1% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Barclays Capital Inc. and Goldman Sachs & Co. are bookrunners for the Rule 144A deal, which carries a greenshoe of $100 million.

The notes are non-callable and have no investor puts.

The notes are contingently convertible until Nov. 15, 2022.

Conversions will be settled in cash, shares or a combination of both at the company’s option, according to a company news release.

In connection with the pricing of the notes, Ligand will enter into convertible note hedge and warrant transactions.

Ligand plans to purchase up to $50 million in company shares in a stock buy-back.

Proceeds will be used to cover the cost of the call spread, for the share buy-back, to acquire or invest in complementary businesses and technologies and for general corporate purposes.

Ligand is a San Diego, Calif.-based biopharmaceutical company focused on developing and acquiring technologies for the pharmaceutical industry.

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