Genzyme Corp. said it has priced a private placement of $600 million in convertible senior notes, with the deal expected to close Tuesday.
The notes will bear an interest rate of 1.25 percent and initially will be convertible into Genzyme common stock at a price of approximately $71.24 per share, or 14.037 shares per $1,000 principal amount of the notes.
Cambridge, Mass.-based Genzyme's shares (NASDAQ:GENZ) closed Thursday at $46.56, down $1.74.
The company has granted the initial purchasers of the notes a 30-day option to purchase up to $90 million more in notes, and expects to use the proceeds to pay off amounts outstanding under its credit facility, to redeem outstanding 3 percent debentures and for general corporate purposes.
About $300 million is outstanding under the credit facility, and $575 million is outstanding in the debentures, first redeemable on May 20, 2004. Exactly how the proceeds will be allocated has yet to be determined, said Genzyme spokesman Dan Quinn.
"That was purposely left vague," he said, which "increases our flexibility to make the right decisions." Paying off the credit facility entirely is "certainly one opportunity available to us," he added, but the proceeds "could be [used for] a combination of all three" listed possibilities.