By Ronda Fears
Nashville, Tenn., April 10 - Duane Reade Inc. sold an upsized $190 million in proceeds of 20-year CATZ, or cash-to-zero, convertible senior notes at 57.276 with a cash coupon of 2.1478% for the first five years, then 0%, for a yield-to-maturity of 3.75% with a 27.5% initial conversion premium via sole lead manager Merrill Lynch & Co. The Rule 144A deal, which was upsized from $110 million in proceeds, sold at the aggressive end of premium guidance.
New York-based Duane Reade, a pharmacy chain, plans to use proceeds to repay its credit facility and for general corporate purposes, including repaying a portion of its 9¼% senior subordinated notes due 2008.
Terms of the new deal are:
Issuer: Duane Reade Inc.
Amount: $190 million, up from $110 million
Greenshoe: $28.5 million, up from $16.5 million
Lead Manager: Merrill Lynch
Maturity Date: April 16, 2022
Coupon: 2.1478% for five years, then 0%
Issue Price: 57.276
Yield-to-Maturity: 3.75%
Conversion Premium: 27.5%
Conversion Price: $40.55
Conversion Ratio: 14.1265
Call: non-callable for five years
Put: in years five, 10 and 15
Contingent Conversion: 110%
Ratings: Moody's: Ba3
| S&P: BB-
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| Settlement Date: | April 16
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