United Therapeutics in $250 Million Convertible Note Offering and Related Note Hedge, Warrant and Accelerated Share Repurchase Transactions

Cleary Gottlieb represented Deutsche Bank Securities as initial purchaser in a $250 million Rule 144A offering by United Therapeutics Corporation of 1.0% convertible senior notes due 2016. Cleary Gottlieb also represented Deutsche Bank AG, London Branch, as counterparty to United Therapeutics in contemporaneous note hedge, warrant and accelerated share repurchase transactions. The note offering (including full exercise of the related over-allotment option) and the concurrent transactions closed on October 17.

In an accelerated share repurchase (or ASR), an issuer purchases shares of its stock from a bank, which generally borrows shares to fulfill its initial delivery obligation and subsequently purchases shares in the open market over a period of time to cover its short position and any subsequent delivery obligation. Funding an ASR with a convertible note offering has the net effect of decreasing the number of an issuer’s outstanding shares even if the issuer’s stock price subsequently rises and the new notes are ultimately converted into shares.

United Therapeutics is a biotechnology company focused on the development and commercialization of unique products to address the unmet medical needs of patients with chronic and life-threatening conditions. It is a leader in the treatment of pulmonary arterial hypertension, a disease affecting blood vessels in the lungs. Cleary Gottlieb also represented Deutsche Bank in United Therapeutics’ previous convertible note offering in 2006, and the related derivatives transactions.