By Stephanie N. Rotondo
Seattle, Sept. 26 – Air Transport Services Group Inc. priced $225 million of convertible senior notes due 2024 at par to yield 1.125% with an initial conversion premium of 35%, the company said in a press release.
The yield priced tighter than the 1.25% to 1.75% talk. The conversion premium came in the middle of the 32.5% to 37.5% talk.
The deal was increased from an expected $200 million.
Goldman Sachs & Co. is the left lead bookrunner on the Rule 144A deal. SunTrust Robinson Humphrey Inc. is also an active bookrunner.
There is a $33.75 million over-allotment option, upsized from $30 million.
Conversions will be settled in cash, unless the company amends its certificate of incorporation to increase the amount of authorized common shares. If such an amendment occurs, conversions will be settled in cash, common stock, or both, at the company’s option.
The initial conversion rate is 31.3475 shares per each $1,000 of notes, equal to an initial conversion price of $31.90 a share.
The notes are contingently convertible prior to April 15, 2024. After that, the issue is convertible at any time.
The convertibles become putable in certain circumstances.
In connections with the offering, Air Transport entered into privately negotiated convertible note hedge transactions with one or more financial institutions. The company also entered into separate privately negotiation warrant transactions with the option counterparties.
The warrants are exercisable at $41.3525 a share, a 75% premium over Monday’s closing share price of $23.63.
A portion of the deal’s proceeds will be used to pay for the hedging transactions. The remaining funds will be used to repay part of the company’s outstanding borrowings under its $545 million revolving credit facility and for general corporate purposes.
Air Transport is a Wilmington, Ohio-based provider of aircraft leasing and air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements.
| Issuer: | Air Transport Services Group Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $225 million
|
| Greenshoe: | $33.75 million
|
| Maturity: | Oct. 15, 2024
|
| Bookrunners: | Goldman Sachs & Co. and SunTrust Robinson Humphrey Inc.
|
| Coupon: | 1.125%
|
| Price: | Par of $1,000
|
| Yield: | 1.125%
|
| Initial conversion premium: | 35%
|
| Initial conversion price: | $31.90 a share
|
| Initial conversion rate: | 31.3475 shares
|
| Contingent conversion: | Prior to April 15, 2024
|
| Put options: | In certain circumstances
|
| Pricing date: | Sept. 25
|
| Settlement date: | Sept. 29
|
| Distribution: | Rule 144A
|
| Talk: | 1.25%-1.75% yield, up 32.5%-37.5%
|
| Stock symbol: | Nasdaq: ATSG
|
| Stock reference price: | $23.63 as of Sept. 25 close
|
| Market capitalization: | $1.433 billion
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
