By Abigail W. Adams
Portland, Me., April 23 – American Eagle Outfitters Inc. priced $400 million of five-year convertible notes after the market close on Wednesday at par with a coupon of 3.75% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the cheap end of talk for a coupon of 3.25% to 3.75% and at the midpoint of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
BofA Securities Inc. and J.P. Morgan Securities LLC were joint bookrunners for the Rule 144A offering, which carries a greenshoe of $60 million.
The notes are non-callable until April 17, 2023 and then subject to a 130% hurdle over the conversion premium.
They are putable upon a fundamental change.
There is dividend protection.
The notes will be settled in cash, shares or a combination of both at the company’s option.
Net proceeds are expected to be $389.4 million or $448.1 million if the greenshoe is exercised in full. Proceeds will be used for general corporate purposes.
American Eagle Outfitters is a Pittsburgh-based clothing and accessories retailer.
| Issuer: | American Eagle Outfitters Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $400 million
|
| Greenshoe: | $60 million
|
| Maturity: | April 15, 2025
|
| Bookrunners: | BofA Securities Inc. and J.P. Morgan Securities LLC
|
| Coupon: | 3.75%
|
| Price: | Par
|
| Yield: | 3.75%
|
| Conversion premium: | 30%
|
| Conversion price: | $8.75
|
| Conversion rate: | 114.2988
|
| Call options: | Non-callable until April 17, 2023 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | April 22
|
| Settlement date: | April 27
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 3.25% to 3.75% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | NYSE: AEO
|
| Stock price: | $6.73 at market close April 22
|
| Market capitalization: | $1.13 billion
|
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