XOMA plans exchange offer for 6.5% convertibles, to sell $10 million of new convertibles

By Jennifer Chiou

New York, Dec. 19 - XOMA Ltd. announced it plans an exchange offer for its $60 million of 6.5% convertible senior notes due 2012 and plans to sell $10 million of new convertibles, according to an S-4 filed with the Securities and Exchange Commission.

The company intends to issue up to $60 million of new 6.5% convertible SNAPs due Feb. 1, 2012 in the offer.

The principal difference between the notes is that the new ones give XOMA the right to automatically convert some or all of the notes if the closing price of its stock has exceeded 150% of the conversion price for at least 20 trading days during a 30-day trading period. Upon automatic or voluntary conversion before 2010, the company will pay four years of additional interest in cash or stock.

The existing notes have an interest make-whole feature if they are called if the company's stock trades above a 150% threshold.

The new notes will also have a delayed call compared to the existing ones, starting in 2010 instead of Deb. 6, 2008.

At the noteholders' option, the new securities are convertible into XOMA shares at an initial conversion rate of 533.4756 shares per $1,000 principal amount of notes - a conversion price of $1.87 per share, the same as the current notes.

XOMA said it is carrying out the exchange so that it can convert all its debt into stock if the share price passes the 150% threshold. In addition, if the notes are called after 2010, the total interest paid will be reduced.

Separately, XOMA also said it is offering to sell an additional $10 million of the new convertibles. Proceeds will go towards general corporate purposes.

Piper Jaffray & Co. and Adams Harkness, Inc. are dealer managers for the exchange and placement agents for the new-money offering (415 984-5141). Wells Fargo Bank, NA is the exchange agent.

Georgeson Shareholder Communications Inc. is the information agent (888 867-6963).

Based in Berkeley, Calif., XOMA develops and manufactures therapeutic antibodies with a focus on cancer and immune diseases. The company has a royalty interest in Raptiva, a monoclonal antibody product for moderate-to-severe plaque psoriasis.

XOMA's stock closed at $1.67 on Dec. 19.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.