Vivus greenshoe exercise increases 4.5% convertibles to $250 million

By Angela McDaniels

Tacoma, Wash., May 31 - Vivus, Inc. said the underwriters for its $220 million sale of 4.5% convertible senior notes due 2020 exercised their $30 million over-allotment option in full on Wednesday, increasing the size of the issue to $250 million.

The company used about $5 million of the proceeds of the greenshoe to pay the cost of a capped call transaction entered into with an affiliate of one of the underwriters, according to a company news release.

As previously reported, the company priced the convertibles on May 15 at par with an initial conversion premium of 15%.

Deutsche Bank Securities Inc. was the bookrunner.

About $30 million of the proceeds of the initial sale were used to pay the cost of a capped call transaction with an affiliate of one of the underwriters. The remainder of the proceeds will be used to commercialize products, to develop product candidates and for general corporate purposes.

The initial cap price is $20.00, boosting the effective premium from the issuer's perspective to 55%.

Mountain View, Calif.-based Vivus is a pharmaceutical company focused on treatments for obesity and sexual dysfunction.

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