By Rebecca Melvin
New York, May 30 - JetBlue Airways Corp. priced an upsized $175 million of 30-year convertible senior debentures late Thursday in two tranches of $87.5 million each to yield 5.5%, according to company news release.
The registered offering size was increased from $160 million, and the deal priced at the cheap end of talk for the coupon which was 5% to 5.5%.
For the premium, the series A tranche's 22.5% initial conversion premium came at the midpoint of talk, which was 20% to 25%; while the series B tranche, with a premium of 20%, priced at the cheap end of talk.
The notes were sold via Morgan Stanley & Co. and Merrill Lynch & Co., and there is a greenshoe of $13,125,000.
Series A will be non-callable for five years. There are puts in years 2013, 2018, 2023, 2028 and 2033.
Series B and will be non-callable for seven years, with puts in years 2015, 2020, 2025, 2030 and 2035.
The debentures will be secured by two escrow accounts, which will hold proceeds equal to the sum of the first six scheduled interest payments.
JetBlue intends to use remaining proceeds to repay up to $175 million of its 3.5% convertible notes due 2033, which are putable July 15. Any additional proceeds will be allocated to general corporate purposes.
Concurrently with the debentures, JetBlue will loan $44.9 million common shares to an affiliate of Morgan Stanley under a share lending agreement.
The share borrower will sell the shares at about $3.70 per share, and the share borrower's resulting short position from the sale will help investors create hedge positions in the convertibles offering.
JetBlue won't receive any proceeds from the share sale, and the shares are not considered dilutive to earnings per share because they must be returned to JetBlue when the debentures are no longer outstanding and in certain other circumstances.
New York-based JetBlue is a discount air carrier.
| Issuer: | JetBlue Airways Corp.
|
| Issue: | Convertible senior debentures
|
| Amount: | $175 million, upsized from $160 million
|
| Greenshoe: | $13,125,000
|
| Tranches: | Two series, $87.5 million each
|
| Maturity: | Oct. 15, 2038
|
| Bookrunners: | Morgan Stanley & Co. and Merrill Lynch & Co.
|
| Coupon: | 5.5%
|
| Price: | Par
|
| Yield: | 5.5%
|
| Price talk: | 5%-5.5%, up 20%-25%
|
| Takeover protection: | Yes, standard
|
| Dividend protection: | Yes, standard
|
| Concurrent offering: | 44.9 million shares at $3.70 each
|
| Pricing date: | May 29
|
| Settlement date: | June 4
|
| Distribution: | Registered
|
| Stock symbol: | Nasdaq: JBLU
|
| Stock price: |
|
|
|
| Series A
|
| Conversion ratio: | 220.6288
|
| Conversion price: | $4.53
|
| Conversion premium: | 22.5%
|
| Calls: | Non-callable until 2013
|
| Puts: | 2013, 2018, 2023, 2028 and 2033
|
|
|
| Series B
|
| Conversion ratio: | 225.2252
|
| Conversion price: | $4.44
|
| Conversion premium: | 20%
|
| Calls: | Non-callable until 2015
|
| Puts: | 2015, 2020, 2025, 2030 and 2035
|
© 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.
