By Ronda Fears
Nashville, June 25 - Nektar Therapeutics sold $100 million of seven-year convertibles at par to yield 3.0% with a 29.7% initial conversion premium, via lead manager Merrill Lynch & Co.
The issue sold at the wide end of revised yield guidance for 2.5% to 3.0% and the cheap end of premium talk for 25% to 30%. Original price talk put the coupon at 1.75% to 2.25%.
San Carlos, Calif.-based Nektar, formerly Inhale Therapeutics, said proceeds would be used for general corporate purposes, including possible repurchases of its existing convertibles, product development and potential acquisitions.
Also, Nektar said has reached agreements in principle with a limited number of holders of its outstanding convertible notes in privately negotiated transactions to repurchase some of those notes for $17.2 million in cash and may make additional repurchases. The company has 3.5% and 5%, both due in 2007.
Terms of the deal are:
Issuer: Nektar Therapeutics
| Issue: | Convertible subordinated notes
|
| Lead manager: | | Merrill Lynch
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| Co-managers: | Deutsche Bank Securities, Lehman Brothers, Friedman Billings Ramsey and SG Cowen
|
| Amount | $100 million
|
| Greenshoe: | $25 million
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| Maturity: | July 1, 2010
|
| Dividend: | 3.0%
|
| Price: | Par
|
| Yield: | 3.0%
|
| Conversion premium: | 29.7%
|
| Conversion price: | $11.35
|
| Conversion ratio: | 88.1057
|
| Call: | Non-callable for 3 years with a 150% hurdle, with make-whole provision for coupon payments minus interest paid
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| Price talk: | Revised 2.5-3.0% (original 1.75-2.25%), up 25-30%
|
| Pricing date: | June 24 after the close
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| Settlement: | June 30
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| Distribution: | Rule 144A
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