New York, May 28 - Salix Pharmaceuticals Ltd. released details on its upsized offering of $300 million of five-year convertible senior notes.
The deal was priced after the close of markets Thursday at par to yield 2.75% with an initial conversion premium of 30%.
The issue was initially going to be $200 million in size.
Salix increased the greenshoe to $45 million from $30 million.
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 Caris & Co, BMO Capital Markets Corp. and JMP Securities LLC.
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. Taking the transactions into account, the effective conversion premium from Salix's perspective is 75%.
Conversions can be paid in cash, stock or a combination at Salix's option.
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.
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Issue: | Convertible senior notes
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Amount: | $300 million, upsized from $200 million
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Greenshoe: | $45 million
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Maturity: | May 15, 2015
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Bookrunners: | Bank of America Merrill Lynch and Jefferies & Co. Inc.
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Co-managers: | Caris & Co, BMO Capital Markets Corp. and JMP Securities LLC
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Coupon: | 2.75%
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Price: | Par of $1,000
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Yield: | 2.75%
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Conversion premium: | 30%
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Conversion price: | $46.38
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Conversion ratio: | 21.5592
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Call protection: | Non-callable for life
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Puts: | No puts
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Price talk: | 2.25%-2.75%, up 30% to 35%
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Pricing date: | May 27
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Settlement: | June 3
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Distribution: | Off shelf
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Net share settlement: | Cash, stock or a combination, at Salix's option
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Capped call: | Raises effective conversion premium to 75%
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Stock reference price: | $35.68
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Stock listing: | Nasdaq: SLXP
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Market capitalization: | $2.03 billion
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