By Rebecca Melvin
New York, April 17 – Pernix Therapeutics Holdings Inc. priced an upsized $130 million of six-year convertible senior notes after the market close Thursday at par to yield 4.25% with an initial conversion premium of 37.5%, according to a syndicate source.
The 4 (2) Regulation D deal, with Rule 144A trading capabilities, was initially talked at $120 million in size.
Pricing came at the cheap end of initial talk for a 3.75% to 4.25% coupon but at the rich end of 35% to 37.5% premium talk, which was revised upward during marketing from 27.5% to 32.5%.
Jefferies & Co. was lead placement agent and BMO Capital Markets was also a placement agent of the deal.
The notes are convertible under certain conditions. They are non-callable for four years and then are provisionally callable if shares exceed 130% of the conversion price. Investors will be compensated for interest in the event of an early call via a make-whole table.
Gross proceeds of $80.9 million are expected to be used to finance the cash consideration of its previously announced acquisition of the Zohydro ER franchise, about $8.3 million will be used to pay related fees and expenses, up to $2.2 million will pay for a previously announced consent solicitation of the company’s 12% senior secured notes due 2020 and remaining proceeds will be for working capital and other general corporate purposes, including acquisitions or investments.
Concurrently with the new notes offering, the company entered into an agreement with holders of its 8% convertible senior notes due 2019, representing about $65 million of the issue, to remove restrictive covenants in the 2019 notes indenture and to convert the notes for 2,338.129 shares of common stock.
Morristown, N.J.-based Pernix is a specialty pharmaceutical company.
| Issuer: | Pernix Therapeutics Holdings Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $130 million, upsized from $120 million
|
| Maturity: | April 1, 2021
|
| Placement agents: | Jefferies & Co., BMO Capital Markets
|
| Coupon: | 4.25%
|
| Price: | Par
|
| Yield: | 4.25%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $11.47
|
| Initial conversion ratio: | 87.2030 shares
|
| Calls: | Non-callable for four years, then provisionally callable at 130% price hurdle
|
| Make-whole feature: | Yes for interest payments in the event of an early call
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Pricing date: | April 16
|
| Settlement date: | April 22
|
| Distribution: | Regulation D, with Rule 144A trading capabilities
|
| Price talk: | Initial talk 3.75%-4.25%, up 27.5%-32.5%
|
| Stock symbol: | NYSE: PTX
|
| Stock reference price: | $8.34 per share
|
| Market capitalization: | $326.3 million
|
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