Vertex Pharmaceuticals to price $375 million of five-year convertibles to yield 3%-3.5%, up 35%

By Rebecca Melvin

New York, Sept. 22 - Vertex Pharmaceuticals Inc. launched an offering of $375 million of five-year convertible senior subordinated notes that were seen pricing Thursday ahead of the open.

The registered deal, which has an over-allotment option for a further $25 million of notes, was talked to yield 3% to 3.5%, with an initial conversion premium fixed at of 35%, according to market sources.

Bank of America Merrill Lynch is the sole underwriter.

The notes have a provisional call prior to Oct. 1, 2013 if the closing price of shares is greater than 130% of the conversion price for at least 20 out of 30 consecutive days. The call price is par plus a make-whole payment for interest. Starting Oct. 1, 2013, the notes have a hard call.

Holders may require Vertex to repurchase all or any part of their notes upon the occurrence of a fundamental change.

The notes will mature Oct. 1, 2015

Vertex is a Cambridge, Mass.-based drug maker. The company plans to use the proceeds for general corporate purposes.

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