Avid Bioservices greenshoe lifts exchangeables to $143.75 million

By Wendy Van Sickle

Columbus, Ohio, March 12 – Underwriters for Avid Bioservices Inc.’s 1.25% five-year exchangeable notes fully exercised their $18.75 million greenshoe, increasing the total deal size to $143.75 million, according to an 8-K filing with the Securities and Exchange Commission.

The company priced $125 million of the convertibles after the market close on March 9 at par at the cheap end of talk with a coupon of 1.25% and an initial exchange premium of 32.5%, as previously reported.

Price talk was for a coupon of 0.75% to 1.25% and an initial exchange premium of 32.5% to 37.5%, according to a market source.

Morgan Stanley & Co. LLC is lead left bookrunner for the Rule 144A offering.

The notes will be issued by Avid SPV LLC and are exchangeable for Avid Bioservices’ shares.

The notes are non-callable until March 20, 2024 and then subject to a 130% hurdle.

They are putable upon a fundamental change.

In connection with the offering, the company entered into capped call transactions with a cap price of $28.02, which represents a premium of 75% over last reported sales price of stock.

Net proceeds will be $138.7 million.

Approximately $11.2 million will be used to cover the cost of the call spread, $41.3 million of the proceeds will be used to redeem the company’s 10.5% series E convertible preferred stock, with remaining proceeds to be used for general corporate purposes.

Avid Bioservices is a Tustin, Calif.-based biologics contract development and manufacturing organization.

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