By Ronda Fears
Nashville, Sept. 25 - Pharmaceutical Resources Inc. sold an upsized $160 million of seven-year convertible notes at par to yield 2.875% with a 35% initial conversion premium via sole bookrunner Bear Stearns & Co.
The Rule 144A deal, upped from $150 million, sold at the tighter end of yield talk for a 2.75% to 3.25% coupon and at the middle of premium guidance of 33% to 37%.
The issue was sold on a call spread, which is intended to mitigate dilution from conversion of the notes.
Holders will have full dividend protection.
The Spring Valley, N.Y.-based generic drug company plans to use proceeds - after spending about $37 million on call options - to support the expansion of its business, including acquisitions, and for general corporate purposes. The cost of the call options will be partially offset by the sale of warrants for an estimated $25 million.
Terms of the new deal are:
Issuer: Pharmaceutical Resources Inc.
| Issue: | Convertible senior subordinated notes
|
| Lead manager: | | Bear Stearns
|
| Amount | $160 million, upped from $150 million
|
| Greenshoe: | $40 million, upped from $30 million
|
| Maturity: | Oct. 1, 2010
|
| Coupon: | 2.875%
|
| Price: | Par
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| Yield: | 2.875%
|
| Conversion premium: | 35%
|
| Conversion price: | $88.76
|
| Conversion ratio: | 11.266
|
| Call: | Non-callable
|
| Contingent conversion: | 110%
|
| Price talk: | 2.75-3.25%, up 33-37%
|
| Pricing date: | Sept. 24, after the close
|
| Settlement: | Sept. 30
|
| Distribution: | Rule 144A
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