Human Genome (HGSI) Underwriters Exercise Full Option Under $430M Notes Offering
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Human Genome Sciences, Inc. (Nasdaq: HGSI) today announced the exercise in full of the underwriter’s option to purchase an additional $64.5 million principal amount of its Convertible Senior Notes due 2018 in connection with its public offering of the notes on November 2, 2011, for a total offering size of $494.5 million. Citigroup is acting as the underwriter, and will purchase the additional $64.5 million principal amount of notes from the company. The offering is expected to close on November 7, 2011, subject to customary closing conditions.
In connection with the exercise of the option to purchase additional notes, the company will enter into capped call transactions with certain counterparties. The company has previously entered into capped call transactions with the counterparties with respect to the shares of the company’s common stock that initially underlie the $430 million of the notes.
The capped call transactions are intended to reduce the potential dilution to the company’s common stock and/or offset any potential cash payments in excess of the principal amount of the converted notes, as the case may be, in connection with conversion of the notes, up to a stock price of approximately $18.45 per share, which is the initial cap on the counterparties’ share delivery and/or cash payment obligation under the capped call transactions. If the market value of the company’s common stock exceeds the cap specified in the capped call transactions, the settlement amount the company receives under such transactions will be capped, and the anti-dilutive and/or offsetting effect of the capped call transactions will be limited.
In connection with the exercise of the option to purchase additional notes, the company will enter into capped call transactions with certain counterparties. The company has previously entered into capped call transactions with the counterparties with respect to the shares of the company’s common stock that initially underlie the $430 million of the notes.
The capped call transactions are intended to reduce the potential dilution to the company’s common stock and/or offset any potential cash payments in excess of the principal amount of the converted notes, as the case may be, in connection with conversion of the notes, up to a stock price of approximately $18.45 per share, which is the initial cap on the counterparties’ share delivery and/or cash payment obligation under the capped call transactions. If the market value of the company’s common stock exceeds the cap specified in the capped call transactions, the settlement amount the company receives under such transactions will be capped, and the anti-dilutive and/or offsetting effect of the capped call transactions will be limited.
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