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Amgen Prices Big Debt Sale

The company sells $5 billion of convertible notes.
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shares were higher Wednesday, a day after the biotech company said it priced an offering of $5 billion of convertible debt.

The Thousand Oaks, Calif., company is selling $2.5 billion of convertible senior notes due 2011 and $2.5 billion of convertible senior notes due 2013. Earlier this week, the company said it planned to sell $4 billion of the notes, but it increased the offering by $1 billion.

Shares of Amgen were up 59 cents, or 0.8%, to $72.52. The company estimates that the net proceeds from the offering will be around $4.9 billion after deducting discounts, commissions and expenses.

Amgen expects to use the proceeds from the offering and funds from a group of warrant transactions to repurchase roughly $3 billion worth of its shares.

Other proceeds will be used for hedge transactions that Amgen expects to arrange with the buyers of the notes. The hedge transactions are meant to offset the dilution to Amgen's common stock if the notes are converted. Any remaining proceeds will be used for general corporate purposes.