By Abigail W. Adams
Portland, Me., April 30 – Callaway Golf Co. priced an upsized $225 million in six-year convertible notes after the market close on Wednesday at par at the rich end of talk with a coupon of 2.75% and an initial conversion premium of 30%, according to a company news release.
Talk had been tightened to a coupon of 2.75% to 3% and an initial conversion premium of 30%, according to a market source.
Initial price talk was for a coupon of 3% to 3.5% and an initial conversion premium of 25% to 30%.
Goldman Sachs & Co. LLC and BofA Securities Inc. are joint bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $33.75 million.
The initial size of the deal was $200 million with a greenshoe of $30 million.
The notes are non-callable until May 6, 2023 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
There is dividend protection.
In connection with the pricing of the notes, the company entered into capped call transactions with a cap price of $27.10, which represents a 100% premium over the last reported sales price of the stock.
Net proceeds are expected to be $217.3 million or $250 million if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the call spread, for working capital and for general corporate purposes.
Callaway Golf is a Carlsbad, Calif.-based golf equipment and active lifestyle company.
| Issuer: | Callaway Golf Co.
|
| Securities: | Convertible senior notes
|
| Amount: | $225 million
|
| Greenshoe: | $33.75 million
|
| Maturity: | May 1, 2026
|
| Bookrunners: | Goldman Sachs & Co. LLC and BofA Securities Inc.
|
| Coupon: | 2.75%
|
| Price: | Par
|
| Yield: | 2.75%
|
| Conversion premium: | 30%
|
| Conversion price: | $17.61
|
| Conversion rate: | 56.7698
|
| Call options: | Non-callable until May 6, 2023
|
| Put options: | Upon a fundamental change
|
| Pricing date: | April 29
|
| Settlement date: | May 4
|
| Distribution: | Rule 144A
|
| Talk: | Revised talk for a coupon of 2.75% to 3% and an initial conversion premium of 30; initial talk for a coupon of 3% to 3.5% and an initial conversion premium of 25% to 30%
|
| Stock symbol: | NYSE: ELY
|
| Stock price: | $13.55 at market close April 29
|
| Market capitalization: | $1.28 billion
|
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