National Editor

Chiron Corp. said it has agreed to sell 30-year convertible debentures to institutional buyers, raising about $450 million.

"We just acquired PowderJect for about $870 million in an all-cash transaction and this gives us an opportunity to replenish our cash on hand," said John Gallagher, media relations manager for Emeryville, Calif.-based Chiron, which entered the deal to acquire Oxford, UK-based PowderJect Pharmaceuticals plc two months ago. (See BioWorld Today, May 20, 2003.)

He said the company will have about $750 million after the debentures are sold by Morgan Stanley of New York.

The debentures, convertible to common stock, include a coupon of 1.625 percent and an initial conversion premium of 47.5 percent, and Chiron may not call them for redemption for five years. Holders will have the option to require Chiron to purchase their debentures at par value in years 5, 10, 15, 20 and 25, at which points Chiron may pay in cash and/or shares of common stock.

Under the terms, the undisclosed initial purchaser also has a 30-day option to buy more debentures, which could give the company up to $50 million more in gross proceeds - all to be used for general corporate purposes.

Chiron's stock (NASDAQ:CHIR) closed Friday at 46.27, down 13 cents.