Paratek talks $125 million six-year convertible notes with a fixed coupon of 4.75%, up 20%

By Abigail W. Adams

Portland, Me., April 18 – Paratek Pharmaceuticals plans to price $125 million of six-year convertible notes prior to the market open on Thursday with price talk for a fixed coupon of 4.75% and a fixed initial conversion premium of 20%, according to a market source.

BofA Merrill Lynch and Leerink Partners are joint bookrunners for the Rule 144A deal, which carries a greenshoe of $18.75 million.

The notes are non-callable for three years and then may be redeemed subject to a 130% hurdle with a make-whole. There are no puts.

Conversions will be settled in stock.

There is standard dividend protection and a make-whole adjustment premium upon conversion in a change of control.

Proceeds will be used to fund clinical studies and the commercial launch of omadacycline, a tetracycline antibiotic, and for general corporate purposes.

Paratek Pharmaceuticals is a Boston-based biopharmaceutical company focused on the development of medications using tetracycline chemistry.

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