By Rebecca Melvin
New York, April 2 - Alpha Natural Resources Inc. priced $250 million of seven-year convertible senior notes at par on Tuesday with a 2.375% coupon and an initial conversion premium of 32.5%, according to a company news release.
The registered off-the-shelf deal came at the rich end of talk for the coupon, which was 2.375% to 2.875%, and at the midpoint of talk for the premium, which was 30% to 35%.
There was a greenshoe of $37.5 million, and a concurrent offering of $150 million of common stock that priced at $41.25 a share.
UBS Investment Bank and Citigroup Global Markets Inc. were bookrunners of both offerings.
Co-managers were Wachovia Capital Markets LLC, Wedbush Morgan Securities Inc., BB&T Capital Markets, a division of Scott & Stringfellow, Inc., BMO Capital Markets Corp., Daiwa Securities America Inc., NatCity Investments Inc., PNC Capital Markets LLC, and SG Americas Securities LLC.
The convertibles are non-callable, and there are no puts. There is a contingent conversion trigger at 130% of the stock price. There is no contingent payment. There is also dividend and takeover protection, and net-share-settlement.
Upon conversion, holders will receive cash up to the principal amount of the notes converted, with excess conversion value delivered in cash and/or common shares.
Alpha Natural Resources is a supplier of Appalachian coal to electric utilities, steel producers and heavy industry.
The coal company plans to use proceeds of both offerings to repurchase up to $175 million of its 10% senior notes due 2012, as well as for other general corporate purposes.
| Issuer: | Alpha Natural Resources Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $250 million
|
| Greenshoe: | $37.5 million
|
| Concurrent offering: | $150 million of common stock at $41.25 per share
|
| Maturity: | April 15, 2015
|
| Bookrunners: | UBS Investment Bank and Citigroup Global Markets Inc.
|
| Co-managers: | Wachovia Capital Markets LLC, Wedbush Morgan Securities Inc., BB&T Capital Markets, BMO Capital Markets Corp., Daiwa Securities America Inc., NatCity Investments Inc., PNC Capital Markets LLC and SG Americas Securities LLC
|
| Coupon: | 2.375%
|
| Price: | Par
|
| Yield: | 2.375%
|
| Conversion premium: | 32.5%
|
| Conversion ratio: | 18.2962
|
| Conversion price: | $54.66
|
| Call: | Non-callable
|
| Puts: | Non-putable
|
| Contingent conversion: | At 130% trigger
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Net-share settlement: | Yes
|
| Pricing date: | April 1
|
| Settlement date: | April 7
|
| Distribution: | Registered, off-the-shelf
|
| Price talk: | 2.375% to 2.875%, up 30% to 35%
|
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