By Abigail W. Adams
Portland, Me., Aug. 12 – Omeros Corp. priced an upsized $210 million of long five-year convertible notes after the market close on Tuesday at par with a coupon of 5.25% and an initial conversion premium of 27.5%, according to an FWP filing with the Securities and Exchange Commission.
Pricing came at the midpoint of talk for a coupon of 5% to 5.5% and at the rich end of talk for an initial conversion premium of 22.5% to 27.5%, according to a market source.
BofA Securities Inc., J.P. Morgan Securities LLC and RBC Capital Markets LLC were joint bookrunners for the registered offering, which carries an upsized greenshoe of $31.5 million.
The initial size of the deal was $200 million with a greenshoe of $30 million.
The notes are non-callable until Aug. 15, 2023 and then subject to a 130% hurdle with a make-whole.
There is dividend and takeover protection.
In connection with the pricing of the convertible notes, the company entered into capped call transactions with a cap price of $26.10, which represents a premium of 80% over the secondary offering.
The company plans to use $127.4 million of proceeds to repurchase $115 million of the principal amount of its 6.25% convertible notes due 2023 in privately negotiated transactions.
Concurrently with the convertible notes offering, the company priced a downsized secondary stock offering of $100 million, or 6.9 million shares at a public offering price of $14.50 per share.
The greenshoe was also downsized to $15 million, or 1,035,000 shares.
The initial size of the secondary offering was $125 million with a greenshoe of $18.75 million.
Net proceeds from the notes offering are expected to be $203.7 million, or $234.4 million of the greenshoe is exercised in full.
Approximately $21.7 million of the proceeds will be used to cover the cost of the call spread, and $127.4 million will be used to fund the repurchase of the 6.25% convertible notes due 2023.
Net proceeds from the common stock offering will be $93.7 million, or $107.8 million if the greenshoe is exercised in full.
Remaining proceeds from the notes offering and proceeds from the equity offering will be used for general corporate purposes.
Omeros is a Seattle-based late-stage biopharmaceutical company.
| Issuer: | Omeros Corp.
|
| Securities: | Convertible senior notes
|
| Amount: | $210 million
|
| Greenshoe: | $31.5 million
|
| Maturity: | Feb. 15, 2026
|
| Bookrunners: | BofA Securities Inc., J.P. Morgan Securities LLC and RBC Capital Markets LLC
|
| Coupon: | 5.25%
|
| Price: | Par
|
| Yield: | 5.25%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $18.49
|
| Conversion rate: | 54.0906
|
| Call options: | Non-callable until Aug. 15, 2023 and then subject to a 130% hurdle
|
| Pricing date: | Aug. 11
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| Settlement date: | Aug. 14
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| Distribution: | Registered
|
| Talk: | Coupon of 5% to 5.5% and initial conversion premium of 22.5% to 27.5%
|
| Stock symbol: | Nasdaq: OMER
|
| Stock price: | $14.50 in secondary offering
|
| Market capitalization: | $866.18 million
|
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