By Stephanie N. Rotondo
Seattle, Aug. 16 – New details emerged on Apollo Commercial Real Estate Finance, Inc.’s $200 million of 4.75% convertible senior notes due 2022 on Wednesday.
The issue was sold at the discounted price of 99, according to a market source.
The deal priced late Tuesday with an initial conversion premium of 10%.
Price talk had been for a 4.25% to 4.75% yield and an initial conversion premium of 10% to 15%.
Morgan Stanley & Co. LLC, BofA Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the joint bookrunners.
There is a $30 million over-allotment option.
Conversions will be settled in cash, stock or a combination of both, at the company’s option. The initial conversion rate is 50.2260 shares per each $1,000 of notes, equal to an initial conversion price of $19.91 a share.
Holders can convert the paper at any time.
The notes are non-callable for life. Holders can put the bonds upon a fundamental change.
The New York-based real estate investment trust will use proceeds to acquire or originate target assets, which include commercial first mortgage loans, subordinate financings, CMBS and other commercial real estate-related debt investments, and for working capital and other general corporate purposes. Pending such uses, the REIT may use a portion of the proceeds to temporarily reduce borrowings under repurchase agreements.
| Issuer: | Apollo Commercial Real Estate Finance
|
| Securities: | Convertible senior notes
|
| Amount: | $200 million
|
| Greenshoe: | $30 million
|
| Maturity: | Aug. 23, 2022
|
| Bookrunners: | Morgan Stanley & Co. LLC, BofA Merrill Lynch, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC
|
| Co-managers: | Deutsche Bank Securities, JMP Securities and Keefe, Bruyette & Woods, Inc.
|
| Coupon: | 4.75%
|
| Price: | 99
|
| Par: | 100
|
| Conversion premium: | 10%
|
| Conversion price: | $19.91
|
| Conversion rate: | 50.226
|
| Call options: | None
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Aug. 15
|
| Settlement date: | Aug. 21
|
| Talk: | 4.25% to 4.75% yield, up 10% to 15%
|
| Stock symbol: | NYSE: ARI
|
| Stock price: | $18.10 as of Aug. 15 close
|
| Market capitalization: | $1.9 billion
|
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