By Rebecca Melvin
New York, Sept. 15 - Volcano Corp. priced $100 million of five-year convertible senior notes after the market close Tuesday to yield 2.875% with an initial conversion premium of 27.5%, according to a news release.
The registered, off-the-shelf deal priced beyond the rich end of coupon price talk, which was 3% to 3.5%, and at the rich end of premium talk of 22.5% to 27.5%.
J.P. Morgan Securities LLC was the bookrunner.
There is a $15 million greenshoe.
The notes will be non-callable for life with no puts. Holders can convert their notes after Dec. 31, 2010 if the common stock is at least 130% of the conversion price for at least 20 out of 30 trading days.
Concurrently with the deal, Volcano entered into convertible bond hedge and warrant transactions. About $8.7 million of proceeds will be used to pay the cost of the hedge transactions, the cost of which will be offset also by the warrant transaction.
Remaining proceeds will be used for working capital and general corporate purposes, with some possibly being used to expand manufacturing capabilities and investment in complementary products, technologies or businesses.
The warrants have an exercise price of $34.88, which is 50% higher than the closing price of the company's stock on Sept. 14.
In connection with establishing its initial hedge position, the option counterparty and affiliates expect to enter into over-the-counter derivative transactions related to the company's common stock concurrently with and/or shortly after the pricing of the notes.
Rancho Cordova, Calif.-based Volcano develops, makes and sells intravascular ultrasound and functional measurement products for vascular and structural heart disease.
| Issuer: | Volcano Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $100 million
|
| Greenshoe: | $15 million
|
| Maturity: | Sept. 1, 2015
|
| Coupon: | 2.875%
|
| Price: | Par
|
| Yield: | 2.875%
|
| Conversion price: | $29.64
|
| Conversion rate: | 33.7339 common shares per $1,000 in notes
|
| Price talk: | 3%-3.5%, up 22.5%-27.5%
|
| Calls: | No calls
|
| Contingent conversion: | Yes, at 130%
|
| Pricing date: | Sept. 14
|
| Settlement date: | Sept. 20
|
| Stock symbol: | Nasdaq: VOLC
|
| Stock reference price: | $23.25
|
| Market capitalization: | $1.18 billion
|
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