By Abigail W. Adams
Portland, Me., April 18 – Aqua America, Inc. priced a downsized $600 million, or 12 million units, of $50-par three-year tangible equity units after the market close on Wednesday at the rich end of talk with a dividend of 6% and a threshold appreciation premium of 22.5%.
Price talk was for a dividend of 6% to 6.5% and a threshold appreciation price of 17.5% to 22.5%, according to a market source.
RBC Capital Markets LLC and Goldman Sachs & Co. LLC are the active bookrunners for the registered offering, which carries a downsized greenshoe of $90 million or 1.8 million units.
The initial size of the deal was for $725 million with a greenshoe of $108.75 million.
BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC are also joint bookrunners.
Each equity unit will consist of a prepaid stock purchase contract and an amortizing note with a maturity of April 30, 2022.
The equity units are callable if the acquisition of Peoples Gas has not closed within a certain time frame subject to a make-whole conversion rate.
The notes are also callable on or after Jan. 30, 2020 at the early mandatory settlement rate, which will be the maximum rate unless stock is above a 130% threshold.
There is dividend and takeover protection.
The tangible equity units priced concurrently with an upsized $1,124,999,992 common stock offering, which priced at $34.62 per share.
The common stock offering carries a greenshoe of $168.75 million, or 4,874,350 shares.
The units will be listed for trade on the New York Stock Exchange under the symbol “WTR-U.”
Proceeds from the combined offerings, together with the proceeds from future debt financing and the private placement of common stock, will be used to fund the acquisition of Peoples Gas and complete the redemption of $314 million of Aqua’s outstanding notes, according to a company press release.
Aqua America is a Bryn Mawr, Pa.-based water utility.
| Issuer: | Aqua America Inc.
|
| Securities: | Tangible equity units
|
| Amount: | $600 million
|
| Greenshoe: | $90 million
|
| Maturity: | April 30, 2022
|
| Bookrunners: | RBC Capital Markets LLC, Goldman Sachs & Co. LLC, BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC
|
| Dividend: | 6%
|
| Price: | Par of $50
|
| Yield: | 6%
|
| Appreciation premium: | 22.5%
|
| Appreciation price: | $42.41
|
| Conversion rate: | Minimum of 1.1790 and maximum of 1.4442
|
| Call options: | Callable on or after Jan. 30, 2020 or if the acquisition of Peoples Gas does not close within a certain time frame
|
| Pricing date: | April 17
|
| Settlement date: | April 23
|
| Distribution: | Registered
|
| Talk: | Dividend of 6% to 6.5% and a threshold appreciation price of 17.5% to 22.5%
|
| Stock symbol: | NYSE: WTR
|
| Stock price: | $34.62 in concurrent offering
|
| Market capitalization: | $6.21 billion
|
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