Sucampo Pharmaceuticals Inc. priced and upsized a previously announced debt offering to repay an existing senior secured credit facility.
The company will issue $260 million worth of 3.25% senior notes due 2021, complete with an option to purchase an additional $40 million worth of the debt.
Interest will be payable semiannually starting June 15, 2017. The notes will also convert into class A Sucampo shares at an initial conversion rate of $16.59 per share.
Sucampo initially planned on issuing $225 million of the debt.
Sucampo Pharmaceuticals secured a $250 million credit facility in October 2015 to fund its planned purchase of R-Tech Ueno. The new debt issue could help free up some of the company's cash, given that Sucampo is required to maintain at least $25 million in a restricted cash account until at least $35 million of the facility is repaid or prepaid.
Leerink Partners LLC is the sole book-running manager of the issue. The sale is expected to close Dec. 27.