Mylan prices tender offers for 5¾%, 6 3/8% notes

By Susanna Moon

Chicago, Sept. 17 - Mylan Laboratories Inc. said it priced its cash tender offers and consent solicitations for its 5¾% senior notes due 2010 and 6 3/8% senior notes due 2015.

The company will pay $1,030.52 for each $1,000 principal amount of the 5¾% notes and $1,075.13 for each $1,000 principal amount of the 6 3/8% notes. Each total payout includes a consent fee of $30 for notes tendered by 5 p.m. ET on Sept. 14, the consent deadline.

Noteholders who tender will also receive accrued interest until the settlement date.

The company priced the payouts at 2 p.m. ET on Sept. 14 using the bid-side yield of the 4 1/8% U.S. Treasury note due Aug. 15, 2010 plus a fixed spread of 50 basis points and based on an assumed payment date of Oct. 1.

As of Sept. 14, Mylan received tenders for $147.4 million of the 5¾% notes, or 98.26% of the principal amount, and $349.8 million of the 6 3/8% notes, or 99.94%.

The tender offers expire at midnight ET on Sept. 28. The offers began on Aug. 31.

The company is also soliciting consents to eliminate substantially all of the restrictive covenants and some events of default in the note indentures. Noteholders who tender must deliver consents and vice versa.

As previously announced, the offers are part of Mylan's broader strategy to establish its new capital structure and in preparation for the consummation of its proposed acquisition of Merck KGaA's generic pharmaceutical business.

The offer for each series of notes is conditioned upon the receipt of consents from holders of at least a majority of those notes, consummation of the merger and satisfaction of certain general conditions.

Merrill Lynch, Pierce, Fenner & Smith Inc. (212 449-4914 or 888 654-8637) and Citigroup Global Markets Inc., (212 723-6106 or 800 558-3745) are the dealer managers and solicitation agents, and Global Bondholder Services Corp. (866 804-2200) is the information agent.

Mylan is a pharmaceutical company based in Canonsburg, Pa.

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