New Issue: OSI Pharmaceuticals upsized $200 million convertibles yield 4.0%, up 23.3%

By Ronda Fears

Nashville, Tenn., Jan. 29 - OSI Pharmaceuticals Inc. sold an upsized $200 million offering of seven-year convertible subordinated notes at par to yield 4.0% and with a 23.3% initial conversion premium - at the rich end of yield guidance of 4.0% to 4.5% and at the midpoint of premium guidance of 17.5% to 22.5%.

Book-runner for the Rule 144A deal, which was increased from $150 million, was Merrill Lynch & Co.

Melville, N.Y.-based OSI, a biotech concern focused on cancer research and drugs, said proceeds may be used for continued development of its product pipeline, licensing and acquisition opportunities and general corporate purposes.

Terms of the new deal are:

Issuer: OSI Pharmaceuticals Inc.

Amount: $200 million

Greenshoe: $30 million

Book-Runner: Merrill Lynch

Maturity Date: Feb. 1, 2009

Yield: 4.0%

Issue Price: par

Yield: 4.0%

Conversion Premium: 23.3%

Conversion Price: $50.00

Conversion Ratio: 20.00

Call: non-callable for three years with a 150% hurdle, then with 140% hurdle

Settlement Date: Feb. 1

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