By Kenneth Lim
Boston, Feb. 1 - Kyphon Inc. on Wednesday priced $350 million of five- and seven-year convertible senior notes within talk.
The $175 million five-year series has a coupon of 1%, while the equally sized seven-year series has a coupon of 1.25%. The initial conversion premium is 24% for both tranches.
The five-year notes were talked at a coupon of 0.75% to 1.25%, while the seven-year series was talked at a coupon of 1% to 1.5%. The initial conversion premium was talked at 20% to 25%.
Each tranche has an over-allotment option for a further $25 million.
Goldman Sachs, JP Morgan and Banc of America were the bookrunners of the Rule 144A offering.
The notes are non-callable and may not be put.
There is dividend and takeover protection.
Kyphon, a Sunnyvale, Calif.-based maker of spinal medical devices, said it will use the proceeds of the offering to retire $310 million of a $425 million senior syndicated bank term loan that it used to buy St. Francis Medical Technologies. It will also use the proceeds to fund convertible hedge and warrant transactions.
| Issuer: | Kyphon Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunners: | Goldman Sachs, JP Morgan and Banc of America
|
| Pricing date: | Jan. 31, after the close
|
| Settlement date: | Feb. 6
|
| Distribution: | Rule 144A
|
|
|
| Five-year tranche
|
| Amount: | $175 million
|
| Greenshoe: | $25 million
|
| Maturity: | Feb. 1, 2012
|
| Coupon: | 1%
|
| Price: | Par
|
| Yield: | 1%
|
| Conversion premium: | 24%
|
| Conversion price: | $58.16
|
| Conversion ratio: | 17.1951
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | 0.75%-1.25%, up 20%-25%
|
|
|
| Seven-year tranche
|
| Amount: | $175 million
|
| Greenshoe: | $25 million
|
| Maturity: | Feb. 1, 2014
|
| Coupon: | 1.25%
|
| Price: | Par
|
| Yield: | 1.25%
|
| Conversion premium: | 24%
|
| Conversion price: | $58.16
|
| Conversion ratio: | 17.1951
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | 1%-1.5%, up 20%-25%
|
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