PDL BioPharma to exchange $119.3 million of 2021, 2024 convertibles

By Rebecca Melvin

New York, Dec. 13 – PDL BioPharma, Inc. announced that it has entered into separate privately negotiated transactions to exchange $119.3 million principal amount of its 2.75% convertible senior notes due 2021 and 2024, according to a company news release.

The notes will be exchanged for $98 million in cash, including $139,900 of accrued and unpaid interest and 13.4 million shares of common stock.

Specifically, the 2021 notes will be exchanged for $39.9 million in cash and 3.5 million shares of common stock, and the 2024 notes will be exchanged for $58.1 million in cash and 9.9 million shares of common stock.

About $19.2 million of the 2021 notes and $11.5 million of the 2024 notes will remain outstanding after the transactions.

Reducing the aggregate $150 million of convertible notes outstanding by about 80% will enable the company to operate with broader flexibility and on more favorable financial terms by lessening the impact of provisions of the convertible note indentures governing such activities, PDL’s president and chief executive officer, Dominique Monnet, said in the news release.

In connection with the exchange transactions, PDL and Royal Bank of Canada entered into an agreement to terminate a portion of the capped call agreements previously entered into for the 2021 and 2024 notes corresponding to the amounts exchanged.

The company will receive cash proceeds from the counterparty of $6.7 million as a result of the partial unwinding of the capped call agreements. The capped call transactions remain in effect for the 2021 and 2024 notes that remain outstanding.

In connection with the partial unwinding of the capped call agreements, the company has entered into an agreement with RBC to purchase 3.2 million shares of PDL common stock previously acquired by RBC to hedge the capped calls. The common stock was acquired by PDL at the closing price of PDL’s common stock on Thursday.

The transactions are subject to customary closings conditions and are expected to close on Dec. 17.

BofA Securities acted as financial adviser to PDL in connection with the transactions.

PDL is an Incline Village, Nev., biopharmaceutical company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.