By Rebecca Melvin
New York, May 27 - Salix Pharmaceuticals Ltd. priced an upsized $300 million of five-year convertible senior notes after the close of markets Thursday at par to yield 2.75% with an initial conversion premium of 30%, according to a syndicate source.
The issue was initially going to be $200 million in size.
Whether the initially talked $30 million greenshoe had also been upsized wasn't immediately known, the syndicate source said, because terms hadn't yet been officially released by Prospect News' deadline.
Pricing came at the cheap end of talk, which was for a yield of 2.25% to 2.75% and an initial conversion premium of 30% to 35%.
The registered offering was sold via joint bookrunning managers Bank of America Merrill Lynch and Jefferies & Co. Inc. Co-managers were BMO, Caris, JMP Securities and Piper Jaffray & Co.
The notes are non-callable for life with no puts.
Salix also entered into capped call transactions in connection with the offering intended to reduce potential dilution upon conversion of the notes, except if the volume-weighted average price of Salix shares exceeds the cap price at the time of conversion.
Proceeds are earmarked for business development and other general corporate purposes, including commercialization of potential products, clinical trials, R&D, and general and administrative expenses. A portion of proceeds will also be used to pay the cost of the capped call transactions.
Salix is based in Raleigh, N.C., and makes and markets prescription pharmaceuticals for the treatment of gastrointestinal diseases.
| Issuer: | Salix Pharmaceuticals Ltd.
|
| Issue: | Convertible senior notes
|
| Amount: | $300 million, upsized from $200 million
|
| Greenshoe: | $30 million
|
| Maturity: | May 15, 2015
|
| Bookrunners: | Bank of America Merrill Lynch and Jefferies & Co. Inc.
|
| Co-managers: | BMO, Caris, JMP Securities and Piper Jaffray & Co.
|
| Coupon: | 2.75%
|
| Price: | Par, $1,000
|
| Yield: | 2.75%
|
| Conversion premium: | 30%
|
| Call protection: | Non-callable for life
|
| Puts: | No puts
|
| Price talk: | 2.25%-2.75%, up 30% to 35%
|
| Pricing date: | May 27
|
| Distribution: | Registered
|
| Stock reference price: | $35.68
|
| Stock listing: | Nasdaq: SLXP
|
| Market capitalization: | $2.03 billion
|
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