OSI Pharmaceuticals launches $150 million 30-year convertible notes; talked at 3%-3.5%, up 57.5%-62.5%

By Evan Weinberger

New York, Jan. 2 - OSI Pharmaceuticals, Inc. launched $150 million in convertible senior subordinated notes due 2038 on Wednesday after the market close.

The convertibles are talked at a 3% to 3.5% coupon and a 57.5% to 62.5% initial conversion premium.

JPMorgan and Merrill Lynch are joint bookrunners of the Rule 144A transaction.

There is a $22.5 million over-allotment option.

The convertibles are set to price Thursday after the close.

The convertibles will carry investor puts in years 5, 10, 15, 20 and 25.

There is contingent conversion with a 130% hurdle and contingent payment subject to a 120% hurdle.

There are embedded warrants providing 55% coverage.

OSI is a Melville, N.Y.-based drug maker. The company plans to use around 30% of the proceeds to repurchase shares of its common stock, to buy back any outstanding issues of its 3.25% convertible senior subordinated notes due 2023 and for general corporate purposes.

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