Type of information: Private placement
Company: Amag Pharmaceuticals (USA - MA)
Funding type: private placement
Amag Pharmceuticals intends to use the net proceeds from the offering of the notes together with cash on hand to repay the approximately $320.8 million of borrowings under, and terminate, its existing credit facility contemporaneously with, or shortly after, the closing of this offering.
- • On May 5, 2017, Amag Pharmaceuticals announced the pricing of $300 million aggregate principal amount of 3.25% Convertible Senior Notes due 2022 in an underwritten public offering registered under the Securities Act of 1933, as amended. Amag has increased the size of the offering from the originally announced $250 million (or $287.5 million assuming full exercise of the underwriters’ over-allotment option). The offering is expected to close on May 10, 2017, subject to customary closing conditions.
- Interest on the notes will be paid semiannually in arrears on June 1 and December 1 of each year at the rate of 3.25% per year, beginning on December 1, 2017. The notes will mature on June 1, 2022, unless earlier repurchased or converted in accordance with their terms prior to such date. Amag will not have the right to redeem the notes prior to maturity. Prior to March 1, 2022, the notes will be convertible at the option of holders of the notes only upon satisfaction of certain conditions and during certain periods, and thereafter, will be convertible at any time until the close of business on the business day immediately preceding the maturity date.
- Upon conversion, holders of the notes will receive shares of Amag common stock, cash or a combination thereof, at Amag’s election. The conversion rate for the notes will initially be 36.5464 shares of Amag common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $27.36 per share, and is subject to adjustment under the terms of the notes.
- This represents a premium of approximately 37.5% over the last reported sale price of $19.90 per share of Amag common stock on The NASDAQ Global Select Market on May 4, 2017.
- Amag estimates that the net proceeds from the offering of the notes will be approximately $291.0 million (or approximately $334.8 million if the underwriters exercise their over-allotment option in full), after deducting the underwriters’ discount and estimated offering expenses payable by Amag.
- Contemporaneously with the offering of the notes, AMAG entered into privately negotiated transactions with certain investors to repurchase on or about May 10, 2017 approximately $158.9 million aggregate principal amount of its existing 2.50% Convertible Senior Notes due 2019 for an aggregate repurchase price of approximately $171.3 million, including accrued interest, with cash on hand.
- • On May 3, 2017, Amag Pharmaceuticals announced that it intends to offer, subject to market and other conditions, $250 million aggregate principal amount of Convertible Senior Notes due 2022 in an underwritten public offering registered under the Securities Act of 1933, as amended. J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are acting as book-running managers for the offering. AMAG expects to grant the underwriters an option to purchase, exercisable within a 30-day period, up to an additional $37.5 million principal amount of notes, solely to cover over-allotments, if any.