By Kenneth Lim
Boston, Nov. 17 - Chattem Inc. on Thursday priced an upsized $125 million of seven-year convertible senior notes within talk, at a coupon of 2% and an initial conversion premium of 26%.
The notes were offered at par, and talk guided for a coupon of 2% to 2.25% and an initial conversion premium of 25% to 27%.
The size of the deal was originally $100 million. There is no greenshoe.
Merrill Lynch was the bookrunner of the Rule 144A offering.
The notes are non-callable, and there are no puts.
There is a contingent conversion hurdle at 130% of the conversion price.
There is dividend and takeover protection and a net-share settlement feature.
Chattem is a Chattanooga, Tenn.-based maker of over-the-counter health care products, supplements and toiletries. It said about $32 million of the proceeds will be used for convertible note hedge and warrant transactions, and additional proceeds will be used to repay $38 million on an outstanding revolving debt. It also plans to use the proceeds to help fund its planned acquisition of five Johnson & Johnson brands and Pfizer's consumer health care business.
| Issuer: | Chattem Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Merrill Lynch
|
| Amount: | $125 million
|
| Maturity: | Nov. 15, 2013
|
| Coupon: | 2%
|
| Price: | Par
|
| Yield: | 2%
|
| Conversion premium: | 26%
|
| Conversion price: | $58.92
|
| Conversion ratio: | 16.9729
|
| Contingent conversion: | 130%
|
| Net-share settlement option: | Yes
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | 2%-2.5%, up 25%-27%
|
| Pricing date: | Nov. 16, after the close
|
| Settlement date: | Nov. 22
|
| Distribution: | Rule 144A
|
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