By Rebecca Melvin
New York, Nov. 2 - Developers Diversified Realty Corp. priced an upsized $305 million offering of 30-year convertible senior notes at par to yield 1.75% with an initial conversion premium of 27.5%, according to prospectus.
The registered deal was initially going to be $300 million in size. The notes came at the midpoint of coupon talk, which was 1.5% to 2%, and at the rich end of 22.5% to 27.5% premium talk.
There is a $45 million greenshoe on the deal, which is being sold via joint bookrunners J.P. Morgan Securities LLC, Goldman Sachs & Co., Deutsche Bank Securities Inc. and UBS Securities LLC.
KeyBanc Capital Markets Inc., RBC Capital Markets Corp., Scotia Capital (USA) Inc. and U.S. Bancorp Investments Inc. served as senior co-managers, while Daiwa Capital Markets America Inc., FBR Capital Markets & Co., ING Financial Markets LLC and RBS Securities Inc. served as co-managers.
The notes are non-callable for five years, and there are puts in years 2015, 2020, 2025, 2030 and 2035.
There is contingent conversion if shares exceed 125% of the conversion price.
Proceeds will be used to reduce balances on the company's corporate revolving credit facilities and for general corporate purposes.
Developers Diversified is a Beachwood, Ohio-based real estate investment trust that focuses on shopping centers and business centers.
| Issuer: | Developers Diversified Realty Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $305 million, upsized from $300 million
|
| Greenshoe: | $45 million
|
| Maturity: | Nov. 15, 2040
|
| Bookrunners: | J.P. Morgan Securities LLC, Goldman Sachs & Co., Deutsche Bank Securities Inc., UBS Securities LLC
|
| Senior co managers: | KeyBank Capital Markets Inc., RBC Capital Markets Corp., Scotia Capital (USA) Inc., U.S. Bancorp Investments Inc.
|
| Co-managers: | Daiwa Capital Markets America Inc., FBR Capital Markets & Co., ING Financial Markets LLC, RBS Securities Inc.
|
| Dividend: | 1.75%
|
| Price: | Par
|
| Yield: | 1.75%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $16.38
|
| Conversion ratio: | 61.0361
|
| Call option: | On Nov. 20, 2015
|
| Puts: | In years 2015, 2020, 2025, 2030 and 2035
|
| Price talk: | 1.5%-2%, up 22.5%-27.5%
|
| Pricing date: | Nov. 1
|
| Settlement date: | Nov. 5
|
| Distribution: | Registered
|
| Stock symbol: | NYSE: DDR
|
| Stock reference price: | $12.85
|
| Market capitalization: | $3.19 billion
|
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