Cepheid ups planned seven-year convertibles to $300 million, tightens talk to 1.25%-1.5%, up 32.5%

By Rebecca Melvin

New York, Feb. 4 - Cepheid's offering of seven-year convertible notes, seen pricing after the market close Tuesday, was upsized to $300 million during marketing from an initially talked $250 million, and price talk was tightened to a 1.25% to 1.5% yield with an initial conversion premium of 32.5%, according to a syndicate source.

The greenshoe for the Rule 144A offering was upsized to $45 million from $37.5 million.

As previously reported, original price talk was for a coupon of 1.5% to 2% and an initial conversion premium of 27.5% to 32.5%.

Morgan Stanley & Co. LLC and Jefferies LLC are the joint bookrunners.

Cepheid expects to enter into capped call transactions with one or more of the initial purchasers of the notes or their respective affiliates. The capped call transactions are expected to reduce potential dilution and/or offset potential cash payments that could be required in excess of the principal amount upon conversion of the notes.

Proceeds of the seven-year non-call paper will be used for general corporate purposes, including potential acquisitions and strategic transactions, and to pay the cost of the capped call transactions.

Sunnyvale, Calif.-based Cepheid is a molecular diagnostics company.

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