Auxilium greenshoe exercised, lifts 1.5% convertibles to $350 million

By Devika Patel

Knoxville, Tenn., Jan. 29 - Underwriters for Auxilium Pharmaceuticals Inc.'s offering of 1.5% 5.5-year convertible senior notes exercised their over-allotment option in full for $25 million more of the convertibles, increasing the size of the issue to $350 million, the company said in an 8-K filed Tuesday with the Securities and Exchange Commission.

As previously reported, the company sold the notes at par on Jan. 24 in a registered, off-the-shelf offering, via joint bookrunners Goldman Sachs & Co. and J.P. Morgan Securities LLC.

The convertibles have an initial conversion premium of 32.5% and an initial $24.17 conversion price, which equals a conversion ratio of 41.3770.

The bonds are non-callable with no puts. There is takeover protection. And in connection with the offering, the company entered into note hedge and warrant transactions or purchased a call spread, which raised the premium from the issuer's perspective.

Proceeds will be used for general corporate purposes, which many include the acquisition of businesses, products or product rights or technologies, and also to pay for the call spread.

Based in Malvern, Pa., Auxilium is a specialty biopharmaceutical company.

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