Spectrum Pharmaceuticals, Inc. (NasdaqGS: SPPI) announced today the pricing of its offering of $100 million aggregate principal amount of 2.75% convertible senior notes due 2018 (the “Convertible Notes”). The Convertible Notes will be offered and sold in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”). The Company has also granted an option to the initial purchasers to purchase up to an additional $20 million aggregate principal amount of Convertible Notes, issuable within 13 calendar days of the original issue date, solely to cover over-allotments. The offering is expected to close on December 23, 2013, subject to satisfaction of customary closing conditions.
The Convertible Notes will bear cash interest at a rate of 2.75% per year, payable semi-annually on June 15 and December 15, beginning on June 15, 2014. The Convertible Notes will not be redeemable prior to maturity. Initially, the Company will settle conversions of the Convertible Notes by delivering shares of the Company’s common stock (“Common Stock”). However, if the Company obtains stockholder approval in accordance with applicable NASDAQ rules, the Company will settle conversions of the Convertible Notes by paying or delivering, as the case may be, shares of Common Stock, cash, or a combination of cash and shares of Common Stock, at the Company's election, based on the conversion rate. The Convertible Notes will mature on December 15, 2018, unless repurchased or converted in accordance with their terms prior to such date. Prior to June 15, 2018, the Convertible Notes will be convertible only upon the occurrence of certain events and during certain periods, and thereafter, at any time until the second scheduled trading day immediately preceding the maturity date. The initial conversion rate will be 95.0107 shares of Common Stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $10.53 per share of Common Stock, subject to adjustment in certain circumstances. This initial conversion price represents a premium of approximately 27.5% above the last reported sale price of the Common Stock of $8.255 per share on December 17, 2013.
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