By Stephanie N. Rotondo
Portland, Ore., Oct. 18 - Regeneron Pharmaceuticals Inc. priced a $400 million issue of 1.875% five-year convertible senior notes at par with an initial conversion premium of 30%, according to a press release published Tuesday.
The Tarrytown, N.Y.-based company priced the convertibles via a Rule 144A offering via bookrunner Goldman Sachs & Co.
There is a $60 million 13-day over-allotment option.
Interest on the notes will be payable semiannually on April 1 and Oct. 1. The notes are convertible into cash or stock, or a combination thereof at the company's option.
The initial conversion rate is 11.9021 common shares per each $1,000 principal amount of notes, which is equal to a conversion price of $84.02 per share.
The conversion price is a 30% premium over the Oct. 17 closing share price of $64.63, according to the press release.
The company has entered into convertible note hedge and warrant transaction with purchasers and/or their affiliates in order to reduce dilution. The strike price of the warrants is $103.41 per share, a 60% premium to the Oct. 17 closing price.
"It's a good rate and gives us flexibility to the conversion side," said Peter Dworkin, vice president of corporate communications in an interview with Prospect News. Regeneron currently has one product on the market - a treatment for a genetic disease - and is working on getting approvals for two other drugs. Additionally, the company is attempting to get approval to market its genetic disease drug as a treatment for gout.
"These funds will help support the commercialization of what we hope will be multiple drug products over the next 12 to 18 months [pending FDA approval]," Dworkin said.
Proceeds will be used, in part, to cover the cost of convertible note hedge transactions connected with the offering and for general corporate purposes.
Regeneron is a biopharmaceutical company focused on producing medicines for serious medical conditions.
| Issuer: | Regeneron Pharmaceuticals Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $400 million
|
| Greenshoe: | $60 million
|
| Maturity: | Oct. 1, 2016
|
| Bookrunner: | Goldman Sachs & Co.
|
| Coupon: | 1.875%, payable semiannually
|
| Price: | Par
|
| Yield: | 1.875%
|
| Conversion premium: | 30%
|
| Conversion price: | $84.02
|
| Conversion ratio: | 11.9021 common shares per $1,000 of notes
|
| Warrant strike price: | $103.41
|
| Warrant premium: | 60% over Oct. 17 stock price
|
| Call option: | Non-callable
|
| Distribution: | Rule 144A
|
| Pricing date: | Oct. 17
|
| Settlement date: | Oct. 21
|
| Stock symbol: | Nasdaq: REGN
|
| Stock price: | $64.63 at close Oct. 17
|
© 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.
