Protein Design Labs $200 million convertibles talked to yield 2.75-3.25%, up 30-35%

By Ronda Fears

Nashville, July 7 - Protein Design Labs Inc. launched $200 million of 20-year convertible subordinated notes talked to yield 2.75% to 3.25% with a 30% to 35% initial conversion premium. A portion of the proceeds may possibly go to take out is existing converts.

The 5.5% convertible due 2007 (CCC) was quoted closing Monday up 3 points to 102.5 bid, 103 offered. The $150 million issue became callable Feb. 15, at accreted value.

Protein Design Labs stock closed Monday up 47 cents, or 3%, to $15.75.

UBS Investment Bank is lead manager of the new Rule 144A deal, which is scheduled to price after the close Tuesday.

The notes will be non-callable for five years. There is a put in year seven for cash only and in years 10 and 15 for cash and/or stock.

Part of the proceeds will be used to collateralize the first three years of interest payments on the new notes.

The company said it may use up to $155 million of remaining proceeds to redeem the outstanding convertible notes.

After that, the company said proceeds would be used for acquisitions, working capital and other general corporate purposes, which includes the current expansion of manufacturing facilities.

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