Cubist Pharmaceuticals has upped the size of its financing offering of convertible notes to as much at $800 million, including overallotments, to pay for its acquisition of Optimer Pharmaceuticals.
The financing will consist of two series of notes.
One will be a financing offering of $300 million in notes which will bear interest of 1.125 percent per year, and be convertible to shares of stock as of Sept. 1, 2018.
The other financing series will be $400 million worth of notes which will bear interest at a rate of 1.875 percent and are redeemable as of March 1, 2020. In addition, the company says underwriters have the option of buying another $50 million worth of both series of notes.
The initial conversion rate for each financing series is 12.1318 shares per $1,000 principal amount of the notes, or an initial conversion price of $82.43 per share.
That’s about 33 percent higher than Cubist’s stock price as of Tuesday.
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