Chiron $450 million overnight convertible talked at 1.5-1.75%, up 45-50%

By Ronda Fears

Nashville, July 24 - Chiron Corp. launched an overnight offering of $450 million of 30-year convertibles talked to yield 1.5% to 1.75% with a 45% to 50% initial conversion premium, joining three others for pricing after the close Thursday.

Lead manager of the Rule 144A deal is Morgan Stanley.

The senior notes will be non-callable for five years with puts in years five, 10, 15, 20 and 25. Holders will have full dividend protection.

There also is a 120% contingent conversion trigger.

There is a $50 million greenshoe available.

Chiron said proceeds would be used for general corporate purposes.

Standard & Poor's assigned an A- rating to the new issue and confirmed Chiron's other ratings while removing them from negative watch. The watch began May 19 following Chiron's announced acquisition of Powderject Pharmaceuticals plc for $890 million in cash. The outlook is negative.

Chiron, which is 43% owned by Swiss pharmaceutical giant Novartis AG, has a very diverse product portfolio, S&P acknowledged, but the Powderject acquisition was a major cash outlay and significant addition of debt.

Nevertheless, S&P said Chiron has a high level of liquidity with $843 million in cash and short-term investments on hand at March 31.

Chiron shares closed Thursday down 65c, or 16.8%, to $3.22.

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