By Rebecca Melvin
Princeton, N.J., Dec. 16 - OSI Pharmaceuticals Inc. priced $100 million of 20-year convertible senior subordinated notes at par to yield 2% with an initial conversion premium of 25%, according to a syndicate source.
The Rule 144A deal priced in the middle of talk for a yield of 1.75% to 2.25% and at the rich end of talk for an initial conversion premium of 20% to 25%.
UBS Investment Bank was bookrunner for the offering.
The notes are non-callable for five years and have a put in years five, 10 and 15.
There is $15 million over-allotment option.
OSI intends to use up to $25 million of the proceeds to buy its common stock concurrently with pricing of the notes, as well as to enter into call spread transactions to reduce dilution from conversion of the notes. Remaining proceeds will be for general corporate purposes.
In connection with the call spread transactions, the initial purchaser of the notes or its affiliates have indicated that they will buy shares of OSI's common stock in secondary market transactions and enter into various derivative transactions near to the time that the notes price.
Melville, N.Y.-based OSI Pharmaceuticals is an oncology-focused biotechnology company.
| Issuer: | OSI Pharmaceuticals Inc.
|
| Issue: | Convertible senior subordinated notes
|
| Bookrunner: | UBS Investment Bank
|
| Amount: | $100 million
|
| Greenshoe: | $15 million
|
| Maturity: | Dec. 15, 2025
|
| Coupon: | 2%
|
| Price: | Par
|
| Yield: | 2%
|
| Conversion premium: | 25%
|
| Conversion price: | $29.43
|
| Conversion ratio: | 33.9847
|
| Call: | Non-callable for five years
|
| Put: | In years five, 10 and 15
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Price talk: | 1.75%-2.25%, up 20%-25%
|
| Pricing date: | Dec. 15
|
| Settlement date: | Dec. 21
|
| Distribution: | Rule 144A
|
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