By Rebecca Melvin
New York, Dec. 2 - Omnicare Inc. priced $500 million of 15-year convertible senior subordinated notes at par late Wednesday to yield 3.75% with an initial conversion premium of 23.5%, according to a news release.
The registered, off-the-shelf offering priced at the midpoint of talk, which was for a 3.5% to 4% coupon and a 20% to 25% initial conversion premium.
There is a $75 million greenshoe.
The notes will be non-callable until Dec. 15, 2018 and then provisionally callable subject to a 120% price hurdle over the conversion price. There are no puts.
There is contingent interest triggered at 120%, or 37.5 basis points per six-month interest period.
Net proceeds will be used to repurchase up to $525 million of Omnicare's 3.25% convertible debentures due 2035 under a tender offer launched Nov. 17.
Some or all excess proceeds will be used to repay outstanding debt, with any remaining for general corporate purposes.
Barclays Capital Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC were the joint bookrunners of the offering; with co-managers Wells Fargo Securities LLC, Mitsubishi UFJ Securities (USA) Inc., RBS Securities Inc. and SunTrust Robinson Humphrey Inc.
Omnicare is a Covington, Ky.-based pharmaceutical services company.
| Issuer: | Omnicare Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | Dec. 15, 2025
|
| Bookrunners: | Barclays Capital Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC
|
| Co-managers: | Wells Fargo Securities LLC, Mitsubishi UFJ Securities (USA) Inc., RBS Securities Inc., SunTrust Robinson Humphrey Inc.
|
| Coupon: | 3.75%
|
| Price: | Par
|
| Yield: | 3.75%
|
| Conversion premium: | 23.5%
|
| Conversion price: | $27.44
|
| Conversion ratio: | 36.4409 shares per bond
|
| Call: | Non-callable for eight years, then provisionally callable subject to a 120% price hurdle
|
| Puts: | No puts
|
| Takeover protection: | Yes, via make-whole table
|
| Dividend protection: | Yes, via conversion rate adjustment
|
| Price talk: | 3.5%-4%, up 20%-25%
|
| Pricing date: | Dec. 1
|
| Settlement date: | Dec. 7
|
| Distribution: | Registered, off-the-shelf
|
| Stock symbol: | NYSE: OCR
|
| Stock reference price: | $22.22
|
| Market capitalization: | $2.58 billion
|
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