Atlas Air greenshoe exercised, lifts convertibles to $289 million

By Marisa Wong

Morgantown, W.Va., May 23 – The underwriters of Atlas Air Worldwide Holdings Inc.’s seven-year convertible senior notes partially exercised the deal’s $39 million over-allotment option, purchasing an additional $29 million of the notes to lift the deal size to $289 million, according to an 8-K filing with the Securities and Exchange Commission.

On May 18, Atlas Air priced an upsized $260 million of the convertible notes at par to yield 1.875% with an initial conversion premium of 32.5%, as previously reported.

The underwritten public offering came upsized from $250 million and at the cheap end of the 1.375% to 1.875% yield talk and the cheap end of the 32.5% to 37.5% premium talk.

Morgan Stanley & Co. LLC, BNP Paribas Securities Corp. and Citigroup Global Markets Inc. are the joint bookrunners.

The deal includes a $39 million 13-day over-allotment option. That was increased from $37.5 million. The greenshoe was partially exercised on May 18.

Conversions will be settled in cash, common stock or a combination, at the company’s option. The notes will be contingently convertible prior to Sept. 1, 2023 and convertible at any time after that date.

The initial conversion rate is 16.3713 shares per each $1,000 of notes, equal to $61.08 per share.

The notes are non-callable. Holders can put the issue in the event of a fundamental change.

In connection with the deal, Atlas entered into privately negotiated convertible note hedge transactions as well as separate privately negotiated warrant transactions with certain financial institutions. The strike price of the warrant transactions is $92.20 a share, a 100% premium over the May 17 closing share price of $46.10.

Proceeds will be used to repay higher-cost revolving credit facility borrowings, to enhance business and financial flexibility, to support long-term growth, to fund the cost of hedging transactions and for general corporate purposes.

Atlas Air is a Purchase, N.Y.-based provider of outsourced aircraft and aviation operating services.

© 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.