Nashville, Nov. 14 - Valeant Pharmaceuticals International, formerly ICN Pharmaceuticals Inc., sold $400 million of convertible subordinated notes in two parts in the Rule 144A market via joint bookrunners Goldman Sachs & Co. and Banc of America Securities.
Tranche A, $200 million of 6.75-year subordinated notes, was issued at par to yield 3.0% with a 40% initial conversion premium - at the aggressive end of price talk for 3.0% to 3.5%, up 35% to 40%.
Tranche B, $200 million of 10-year subordinated notes, was issued at par to yield 4.0% with a 40% initial conversion premium - at the middle of yield talk for 3.75% to 4.25% and the aggressive end of premium talk for 35% to 40%.
Holders of both tranches will have dividend protection in the form of a conversion ratio adjustment, if the company boosts its common stock cash dividend. Currently, there is a 1.29% dividend yield on the common stock.
Valeant said a portion of the proceeds was used to enter into convertible note hedges and buy written call options, with a $39.515 strike price, to limit the dilution impact of the convertible issue. Remaining proceeds will be used to retire a portion of the old ICN 6.5% convertible subordinated notes due 2008 and for general corporate purposes, including potential acquisitions.
Terms of the deal are:
Tranche A
| Issuer: | Valeant Pharmaceuticals International
|
| Issue: | Convertible subordinated notes
|
| Lead managers: | Goldman Sachs & Co. and Banc of America Securities
|
| Amount: | $200 million
|
| Greenshoe: | $40 million
|
| Maturity: | 2010
|
| Coupon: | 3.0%
|
| Price: | Par
|
| Yield: | 3.0%
|
| Conversion premium: | 40%
|
| Conversion price: | $31.612
|
| Conversion ratio: | 31.6336
|
| Call: | Noncallable
|
| Rating: | S&P: B
|
| Price talk: | 3.0-3.5%, up 35-40%
|
| Pricing date: | Nov. 13, after the close
|
| Settlement date: | Nov. 20
|
| Distribution: | Rule 144A
|
|
|
| Tranche B
|
| Issuer: | Valeant Pharmaceuticals International
|
| Issue: | Convertible subordinated notes
|
| Lead managers: | Goldman Sachs & Co. and Banc of America Securities
|
| Amount: | $200 million
|
| Greenshoe: | $40 million
|
| Maturity: | 2013
|
| Coupon: | 4.0%
|
| Price: | Par
|
| Yield: | 4.0%
|
| Conversion premium: | 40%
|
| Conversion price: | $31.612
|
| Conversion ratio: | 31.6336
|
| Call: | Noncallable for 7.5 years
|
| Rating: | S&P: B
|
| Price talk: | 3.75-4.25%, up 35-40%
|
| Pricing date: | Nov. 13, after the close
|
| Settlement date: | Nov. 20
|
| Distribution: | Rule 144A
|
|
|
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