Shire refinances with $1B bond

UK-based Shire says that it intends to make an offering of $1.0 billion principal amount of convertible bonds due 2014 to international institutional investors outside the USA that are non-US persons. The proceeds will provide refinancing on attractive terms for part of the bank facilities put in place for the recent $2.6 billion acquisition of New River Pharmaceuticals, says the drugmaker (Marketletter February 26).

The bonds will be convertible into ordinary shares of Shire, and are expected to have a semi annual coupon in the range of 2 5/8% to 3 1/8% per annum and an expected initial conversion price at a premium of 45% to 50% above the volume weighted average price of the shares during the course of today up to the time of pricing.

Shire intends to use all of the net proceeds to repay and cancel part of the $1.3 billion drawn down by the group under its $2.3 billion bank facilities to part fund the recent acquisition. A further $1.0 billion remains available under these bank facilities for general corporate purposes, including future acquisitions.