By E. Janene Geiss
Philadelphia, Jan. 4 - OSI Pharmaceuticals, Inc. priced an upsized $175 million 3% series convertible senior subordinated notes due Jan. 15, 2038 with a 65% initial conversion premium after the market close on Thursday.
The deal came in richer than talk, which had been for a 3% to 3.5% coupon and a 57.5% to 62.5% initial conversion premium. The deal was initially set for $150 million.
JPMorgan and Merrill Lynch are joint bookrunners of the Rule 144A transaction.
There is a $25 million over-allotment option, which was upsized from a planned $22.5 million greenshoe.
The initial conversion price is $73.82 per share, a 65% premium over the Jan. 3 closing share price of $44.73. That is a conversion rate of 13.5463 shares per $1,000 note.
OSI an call the notes starting on Jan. 15, 2013 at par.
The convertibles will carry investor puts in years five, 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.
The company said it plans to use $65 million of the proceeds to repurchase 1.5 million shares of its common stock. The remainder will go to buy back its 3.25% convertible senior subordinated notes due 2023 and for general corporate purposes.
OSI is a Melville, N.Y.-based drug maker.
| Issuer: | OSI Pharmaceuticals, Inc.
|
| Issue: | Convertible senior subordinated notes
|
| Amount: | $175 million, upsized from $150 million
|
| Greenshoe: | $25 million, upsized from $22.5 million
|
| Maturity: | Jan. 15, 2038
|
| Coupon: | 3%
|
| Price: | Par
|
| Yield: | 3%
|
| Conversion premium: | 65%
|
| Conversion price: | $73.82
|
| Conversion ratio: | 13.5463
|
| Contingent conversion: | 130%
|
| Contingent payment: | 120%
|
| Call: | Jan. 15, 2013 onwards at par
|
| Puts: | Jan. 15 of 2013, 2018, 2023, 2028, 2033 at par
|
| Bookrunners: | JPMorgan and Merrill Lynch
|
| Pricing date: | Jan. 4
|
| Settlement date: | Jan. 9
|
| Distribution: | Rule 144A
|
| Talk: | 3% - 3.5% coupon, 57.5% - 62.5% conversion premium
|
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