By Rebecca Melvin
New York, March 11 – NuVasive Inc. priced $550 million of five-year convertible senior notes after the market close on Thursday at par to yield 2.25% with an initial conversion premium of 32.5%, according to a company news release.
Pricing of the Rule 144A deal came at the rich end of 2.25% to 2.75% coupon talk and at the midpoint of 30% to 35% premium talk.
There is a $100 million greenshoe for the deal, which was sold via joint bookrunners BofA Merrill Lynch and Goldman Sachs & Co.
The bonds are non-callable for three years and then are provisionally callable if shares exceed 130% of the conversion price. There are no puts.
There is full dividend protection and protection for investors upon a change of control.
In connection with the pricing of the notes, NuVasive entered into convertible note hedge and warrant transactions with affiliates of one or more of the initial purchasers. The strike price of the warrant transactions will initially be $80.00 per share, which represents an initial conversion premium of 77% from the issuer’s perspective.
About $344 million of the proceeds will be used to repurchase about $277 million of NuVasive’s outstanding $402.5 million of 2.75% convertible notes due 2017. About $56 million will be used to purchase the bond hedge, and remaining proceeds are for general corporate purposes.
San Diego-based NuVasive is a medical device company focused on developing products for minimally disruptive surgical treatments for the spine.
| Issuer: | NuVasive Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $550 million
|
| Greenshoe: | $100 million
|
| Maturity: | March 15, 2021
|
| Bookrunners: | BofA Merrill Lynch, Goldman Sachs & Co.
|
| Coupon: | 2.25%
|
| Price: | Par
|
| Yield: | 2.25%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $59.82
|
| Conversion ratio: | 16.7158
|
| Call: | Non-callable until March 20, 2019, then provisionally callable at 130% price hurdle
|
| Puts: | No puts except a takeover put
|
| Bond hedge: | Yes, strike on the warrants is $80.00, boosting premium to 77% from the issuer’s perspective
|
| Price talk | 2.25%-2.75%, up 30%-35%
|
| Pricing date: | March 10
|
| Settlement date: | March 16
|
| Distribution: | Rule 144A
|
| Stock symbol: | Nasdaq: NUVA
|
| Stock price: | $45.15 at close March 10
|
| Market capitalization: | $2.26 billion
|
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