By Rebecca Melvin
Princeton, N.J., Sept. 23 - Nektar Therapeutics Inc. priced an upsized $275 million of seven-year convertibles at par to yield 3.25% with an initial conversion premium of 32.5%. The issue has a $40 million greenshoe, a syndicate source said.
The deal was originally expected to be $200 million with a $50 million greenshoe.
The Rule 144A deal sold via joint bookrunners Lehman Brothers and Merrill Lynch & Co. priced at the rich end of talk, which called for a yield of 3.25% to 3.75% and an initial conversion premium of 27.50% to 32.50%.
The convertible subordinated notes have a call in year three and no puts.
A portion of proceeds have already been earmarked to repurchase $71 million of Nektar's existing convertible notes, and additional proceeds may be used for this purpose, the company said.
Remaining net proceeds will be used for general corporate purposes, including investing in or furthering product development, acquisitions and developing technologies.
Nektar is a San Carlos, Calif.-based drug delivery company.
| Issuer: | Nektar Therapeutics Inc.
|
| Issue: | Convertible subordinated notes
|
| Bookrunners: | Merrill Lynch and Lehman Brothers
|
| Amount: | $275 million
|
| Greenshoe: | $40 million
|
| Maturity: | Sept. 28, 2012
|
| Coupon: | 3.25%
|
| Price: | Par
|
| Yield: | 3.25%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $21.52
|
| Conversion ratio: | 46.4727
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Call: | Non-callable for three years
|
| Put: | No puts
|
| Price talk: | 3.25%-3.75%, up 27.50%-32.50%
|
| Pricing date: | Sept. 22, after the close
|
| Settlement date: | Sept. 28
|
| Distribution: | Rule 144A
|
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