Vaxcyte Closes $575 Million Of 1.50% Convertible Notes And A Stock Sale Priced At $64.00
Both over-allotment options were exercised in full, and the notes convert at about $89.60 a share, the company's 8-K says.
Vaxcyte closed the sale of $575,000,000 of 1.50% convertible senior notes due 2032 on October 9, alongside a stock offering, according to an 8-K filed Friday. The notes are $500,000,000 of base notes plus a $75.0 million over-allotment option that underwriters exercised in full on October 7.
What the 8-K says
The stock side priced October 6 with Jefferies and Leerink Partners as representatives: 7,412,500 shares at $64.00 and pre-funded warrants on 400,000 shares at $63.999. A pre-funded warrant is a warrant with an exercise price of just $0.001 a share. Underwriters also exercised in full, on October 7, their option on 1,171,875 more shares. Vaxcyte sold all the shares and warrants itself.
Net proceeds, after underwriting discounts and estimated expenses and including both options, were about $544.3 million from the equity offering and $558.7 million from the notes. Per the pricing term sheet, underwriters buy shares from the company at $60.64, a $3.36 discount to the $64.00 public price.
The topline summary of the deal says proceeds are earmarked for VAX-31 pneumococcal vaccine trials and a potential U.S. adult launch.
The notes: coupon, conversion and call terms
The notes are senior, unsecured obligations paying 1.50% a year, semi-annually on April 15 and October 15, with the first payment due April 15, 2027. They mature October 15, 2032.
The initial conversion rate is 11.1607 shares per $1,000 of notes, or about $89.60 a share. Vaxcyte can settle conversions in cash, shares or a mix, at its choice. Before July 15, 2032, holders can convert only on certain events.
Vaxcyte may redeem the notes in cash from October 22, 2029 only if its stock closes above 130% of the conversion price on at least 20 of 30 consecutive trading days. If it calls fewer than all notes, at least $75.0 million must stay outstanding.
What it changes
For shareholders, the equity sale adds shares and warrant shares at $64.00, and the notes could add shares at about $89.60 if Vaxcyte chooses to settle in stock. The Friday regular-session close was $71.38, per market data.
For 60 days from the prospectus date, Vaxcyte itself may not issue or sell new stock without written consent from Jefferies and Leerink Partners, with listed exceptions. The company's directors and executive officers also signed lock-up agreements, a condition of the underwriting.
The first coupon on the notes is due April 15, 2027.
Sources
- 8-K Filing — Vaxcyte, Inc. (PCVX) — SEC EDGAR
- Exhibit d150490dex11.htm — Vaxcyte, Inc. 8-K exhibit — SEC EDGAR
- Vaxcyte Announces Pricing of Concurrent Public Offerings of Common Stock, Pre-Funded Warrants and Convertible Senior Notes – Company Announcement - FT.com — Financial Times
- Vaxcyte Announces Commencement of Proposed Public Offerings — globenewswire.com
- Vaxcyte Announces Pricing of Concurrent Public Offerings of — globenewswire.com
