BRISTOL, Tenn., March 22 /PRNewswire-FirstCall/ -- King Pharmaceuticals, Inc. announced today that it has commenced a private offering of $400 million of convertible senior notes due 2026 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). As part of the offering, King will grant the initial purchasers of the notes an over-allotment option to purchase up to an additional $60 million aggregate principal amount of notes.
The notes will pay interest semiannually and be convertible upon the occurrence of specified events. Upon conversion, King will pay cash equal to the lesser of the principal amount and the conversion value of such notes, and, if the conversion value exceeds the principal amount, cash or shares of its common stock as King may elect. The interest rate, conversion price and other terms are to be determined by negotiations between King and the initial purchasers of the notes.
The notes will be senior unsecured and unsubordinated obligations of King and will rank, in right of payment, pari passu with all of King's existing and future senior unsecured and unsubordinated indebtedness, including its 2-3/4% Convertible Debentures due November 15, 2021 ("2021 Convertible Debentures"). King intends to use the net proceeds from the offering to repurchase, from time to time, or redeem its 2021 Convertible Debentures, of which $345 million currently remains outstanding, and for general corporate purposes.
The notes and the common stock issuable upon exchange of the notes have not been registered under the Securities Act, or applicable state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.
This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offers of the securities will be made only by means of a private offering memorandum.
Forward-looking Statements
This news release contains forward-looking statements which reflect management's current views of future events and operations, including, but not limited to, statements pertaining to the completion of the private debt offering; and statements pertaining to the use of the proceeds of the private debt offering to repurchase or redeem its 2021 Convertible Debentures and for general corporate purposes. These forward-looking statements involve certain significant risks and uncertainties, and actual results may differ materially from the forward-looking statements. Some important factors which may cause actual results to differ materially from the forward-looking statements include: dependence on the level of interest in and demand for the private debt offering; and dependence on King's ability to repurchase or redeem its 2021 Convertible Debentures as expected. Other important factors that may cause actual results to differ materially from the forward-looking statements are discussed in the "Risk Factors" section and other sections of King's Form 10-K for the year ended December 31, 2005, which is on file with the U.S. Securities and Exchange Commission. King does not undertake to publicly update or revise any of its forward-looking statements even if experience or future changes show that the indicated results or events will not be realized.
King Pharmaceuticals, Inc.
CONTACT: James E. Green, Executive Vice President, Corporate Affairs,+1-423-989-8125, or David E. Robinson, Senior Director, Corporate Affairs,+1-423-989-7045, both of King Pharmaceuticals, Inc.
Web site: http://www.kingpharm.com//
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