Nektar $200 million seven-year convertibles talked to yield 3.25%-3.75%, up 27.50%-32.50%

By Rebecca Melvin

Princeton, N.J., Sept. 21 - Nektar Therapeutics Inc. is expected to price $200 million of seven-year convertibles on Thursday after the close, a syndicate source said.

The Rule 144A deal, being sold via joint bookrunners Lehman Brothers and Merrill Lynch & Co., is talked to yield 3.25% to 3.75% with an initial conversion premium of 27.50% to 32.50%, the source said.

The convertible subordinated notes are callable in year three and have no puts, the source said.

There is a $50 million greenshoe available.

Proceeds may be used to fund repurchases of its existing convertible subordinated notes, the company said, with remaining proceeds earmarked for general corporate purposes, including investing in or furthering various product development programs, undertaking potential acquisitions and developing technologies.

The company has about $113 million outstanding of its 3.5% convertibles and a small amount outstanding of its 5% convertibles.

Nektar is a San Carlos, Calif.-based drug delivery company.

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