By Abigail W. Adams
Portland, Me., March 10 – Avid Bioservices Inc. priced $125 million of five-year exchangeable notes after the market close on Tuesday at par at the cheap end of talk with a coupon of 1.25% and an initial exchange premium of 32.5%, according to a company news release.
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, which carries a greenshoe of $18.75 million.
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 are expected to be $120.6 million or will be $138.7 million if the greenshoe is exercised in full.
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.
| Issuer: | Avid SPV LLC
|
| Securities: | Exchangeable notes
|
| Amount: | $125 million
|
| Greenshoe: | $18.75 million
|
| Maturity: | March 15, 2026
|
| Bookrunner: | Morgan Stanley & Co. LLC
|
| Coupon: | 1.25%
|
| Price: | Par
|
| Yield: | 1.25%
|
| Exchange premium: | 32.5%
|
| Exchange price: | $21.21
|
| Exchange rate: | 47.1403
|
| Call options: | Non-callable until March 20, 2024 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | March 9
|
| Settlement date: | March 12
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0.75% to 1.25% and initial exchange premium of 32.5% to 37.5%
|
| Stock symbol: | Nasdaq: CDMO
|
| Stock price: | $16.01 at market close March 9
|
| Market capitalization: | $969.5 million
|
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