By Rebecca Melvin
New York, May 16 - Vivus Inc. priced an upsized $220 million of seven-year convertible senior notes late Wednesday at par to yield 4.5% with an initial conversion premium of 15%, according to a news release.
The Rule 144A deal was initially talked at $200 million in size. Pricing came at the midpoint of 4.25% to 4.75% coupon talk and at the cheap end of 15% to 20% premium talk.
There is an over-allotment option for up to an additional $30 million of notes.
The deal was sold via bookrunner Deutsche Bank Securities Inc.
Proceeds will be used to commercialize products and develop product candidates and for general corporate purposes. About $30 million of the proceeds will be used to pay the cost of a capped call transaction with an affiliate of one of the initial purchasers of the notes.
The initial cap price is $20.00, boosting the effective premium from the issuer's perspective to 55%.
The notes are non-callable with no puts. They have net share settlement and contingent conversion if shares rise to 130% of the conversion price, and they have takeover protection.
Mountain View, Calif.-based Vivus is a pharmaceutical company focused on treatments for obesity and sexual dysfunction.
| Issuer: | Vivus Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $220 million, upsized from $200 million
|
| Greenshoe: | $30 million
|
| Maturity: | May 1, 2020
|
| Bookrunner: | Deutsche Bank Securities Inc.
|
| Coupon: | 4.5%
|
| Price: | Par
|
| Yield: | 4.5%
|
| Conversion premium: | 15%
|
| Conversion ratio: | 67.3038
|
| Conversion price: | $14.86
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Net share settlement: | Yes
|
| Contingent conversion: | Yes, at 130%
|
| Capped call: | Yes, initial cap price of $20.00, boosting premium from the issuer's perspective to 55%
|
| Takeover protection: | Yes
|
| Price talk: | 4.25%-4.75%, up 15%-20%
|
| Pricing date: | May 15
|
| Settlement date: | May 21
|
| Stock symbol: | Nasdaq: VVUS
|
| Stock reference price: | $12.91 as of close May 15
|
| Distribution: | Rule 144A
|
| Market capitalization: | $1.3 billion
|
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