Theravance launches $150 million convertible notes due 2015; talked at 2.75%-3.25%, up 25%-30%

By Evan Weinberger

New York, Jan. 15 - Theravance Inc. launched $150 million in convertible subordinated notes due Jan. 15, 2015 on Tuesday after the market close.

The convertibles are talked at a coupon of 2.75% to 3.25% and a 25% to 30% initial conversion premium.

Goldman Sachs and Merrill Lynch are joint bookrunners of the Securities and Exchange Commission registered transaction.

There is a $22.5 million over-allotment option.

The convertibles are set to price Wednesday after market close.

The convertibles have call protection for the first four years and there is a provisional call in years five through seven subject to a 130% hurdle.

The convertibles carry dividend protection and takeover protection in the form of a make-whole agreement. There is no public acquisition waiver.

Theravance is a South San Francisco, Calif.-based biopharmaceutical company. The company plans to use the proceeds for general corporate purposes, including drug research and development.

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