By Abigail W. Adams
Portland, Me., Sept. 14 – Sarepta Therapeutics Inc. priced $1 billion of five-year convertible notes after the market close on Tuesday at par with a coupon of 1.25% and an initial conversion premium of 35%, according to a company news release.
Pricing came at the rich end of talk for a coupon of 1.25% to 1.75% and at the midpoint of talk for an initial conversion premium of 32.5% to 37.5%, according to a market source.
J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC were bookrunners for the Rule 144A offering, which carries a greenshoe of $150 million.
Approximately $20 million of the aggregate amount was placed with an entity affiliated with the board of directors in a concurrent private placement.
The notes are non-callable until Sept. 20, 2025 and then subject to a 130% hurdle.
In connection with the offering, the company entered into capped call transactions with a cap price of $210.32, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $979.4 million or will be $1.1 billion if the greenshoe is exercised in full.
Approximately $110.7 million of net proceeds will be used to fund the call spread; $248.3 million will be used to repurchase for cash $150.6 million in principal of the company’s 1.5% convertible notes due 2024 in privately negotiated transactions; approximately $585.5 million will be used to repay and terminate its credit agreement; and remaining amounts to be used for general corporate purposes.
Sarepta is a Cambridge, Mass.-based biopharmaceutical company focused on rare diseases.
| Issuer: | Sarepta Therapeutics Inc.
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| Amount: | $1 billion
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| Greenshoe: | $150 million
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| Issue: | Convertible senior notes
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| Maturity: | Sept. 15, 2027
|
| Bookrunners: | J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC
|
| Coupon: | 1.25%
|
| Price: | Par
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| Yield: | 1.25%
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| Conversion premium: | 35%
|
| Conversion price: | $141.97
|
| Conversion rate: | 7.0439
|
| Call options: | Non-callable until Sept. 20, 2025 and then subject to a 130% hurdle
|
| Put options: | None
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| Pricing date: | Sept. 13
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| Settlement date: | Sept. 16
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| Distribution: | Rule 144A; Section 4(a)(2) private placement
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| Talk: | Coupon of 1.25% to 1.75% and initial conversion premium of 32.5% to 37.5%
|
| Stock symbol: | Nasdaq: SRPT
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| Stock price: | $105.16
|
| Market capitalization: | $9.21 billion
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