A Medical Device Daily

Advanced Medical Optics (AMO; Santa Ana, California) reported the pricing of a private offering of $450 million of its 3.25% convertible senior subordinated notes due 2026 to qualified institutional buyers. Sale of the notes is expected to close on June 13, subject to customary conditions.

AMO said it expects to use the proceeds from the offering, plus borrowings under its senior credit facility, to purchase $500 million worth of shares of its common stock, as well as to purchase up to $100 million in aggregate principal amount of its outstanding convertible notes through privately negotiated repurchases. The common stock will be purchased through an accelerated share repurchase arrangement with one or more of the initial purchasers and/or their affiliates, with substantially all of the shares being delivered with the closing of the sale of the notes or shortly thereafter.

The notes will be unsecured senior subordinated obligations of AMO. AMO will pay interest on the notes semi-annually at an annual rate of 3.25%. Prior to July 1, 2014, the notes will be convertible, only upon specified events, at the option of the holder into cash and, in certain circumstances, shares of AMO's common stock at an initial conversion price of $59.61 per share (or an initial conversion rate of 16.7771 shares per $1,000 principal amount of notes).

On and after July 1, 2014, and prior to maturity, the notes will be convertible at the option of the holder into cash and, in certain circumstances, shares of AMO's common stock at the initial conversion rate, subject to adjustment. The initial conversion price represents a 30% premium to the $45.85 per share closing price of AMO's common stock on the New York Stock Exchange on June 7.

Beginning Aug, 4, 2014, AMO may redeem any or all of the notes at a price of 100% of their principal amount, plus accrued and unpaid interest. Holders may require AMO to repurchase the notes at a repurchase price equal to 100% of their principal amount, plus accrued and unpaid interest, on Aug. 1, 2014, Aug. 1, 2017, and Aug. 1, 2021, or at any time prior to their maturity.

AMO is a developer of advanced vision technologies.

Minrad International (Buffalo, New York) reported that the underwriters of its recent public offering of 10 million shares, closed on May 30, have exercised their option to purchase an additional 1.5 million shares at $3.25 per share, raising more than $4.87 million.

Minrad said it intends to use net proceeds from the sale of these additional shares for general corporate purposes.

Oppenheimer & Co. acted as lead managing underwriter of the offering. KeyBanc Capital Markets and Maxim Group acted as co-managing underwriters.

Minrad is an interventional pain management company with real-time image guidance and anesthesia and analgesia product lines.

In other financing activity: ResCare (Louisville, Kentucky), a provider of residential, training and support services for people with disabilities and special needs, reported that it has amended its senior secured credit facility, providing lower interest rates on outstanding borrowings and letters of credit and increases the revolver capacity by $25 million to $200 million.

A $50 million “accordion feature” remains in place, which the company said allows it to expand its total borrowing capacity to $250 million.

Ronald Geary, ResCare chairman, president and CEO, said, “The amended credit facility gives us greater borrowing capacity and a lower cost of capital to support our continued growth strategy.”

The credit facility, which expires on Oct. 3, 2010, will be used primarily for working capital purposes, letters of credit required under its insurance programs and for acquisitions.

ResCare, founded in 1974, provides services in 36 states, the District of Columbia, Puerto Rico and Canada.

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