By Ronda Fears
Nashville, Sept. 3 - OSI Pharmaceuticals Inc. sold $100 million of 20-year convertible notes at par to yield 3.25% with a 32.5% initial conversion premium, via sole bookrunner Merrill Lynch & Co.
The Rule 144A issue sold at the cheap end of price talk, which had put the yield at 3.0% to 3.25% with a 32.5% to 35% initial conversion premium.
The Melville, N.Y. biotechnology firm said up to $20 million of proceeds would be used to repurchase shares concurrently with the offering. Also, about $12.5 million will be used to purchase U.S. Treasuries to collateralize the first six interest payments.
OSI said the balance of proceeds would be used to support continued development of its oncology franchise, including possible acquisitions and general corporate purposes.
Terms of the new deal are:
Issuer: OSI Pharmaceuticals Inc.
| Issue: | Convertible senior notes
|
| Lead manager: | | Merrill Lynch & Co.
|
| Co-manager: | Morgan Stanley
|
| Amount | $135 million
|
| Greenshoe: | $15 million
|
| Maturity: | Sept. 1, 2023
|
| Coupon: | 3.25%
|
| Price: | Par
|
| Yield: | 3.25%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $50.02
|
| Conversion ratio: | 19.992
|
| Call: | Non-callable for 5 years
|
| Put: | In years 5, 10 and 15
|
| Price talk: | 3.0-3.25%, up 32.5-35%
|
| Pricing date: | Sept. 3, before the open
|
| Settlement: | Sept. 8
|
| Distribution: | Rule 144A
|
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