By Rebecca Melvin
New York, March 3 - Old Republic International Corp. priced a hugely upsized $500 million of seven-year convertible senior notes after the market close Wednesday at par with a 3.75% yield and an initial conversion premium of 32.5%, according to a term sheet.
The deal was increased from a planned amount of $250 million. The greenshoe was raised to $50 million from $37.5 million.
Old Republic decided not to proceed with a concurrent offering of $250 million of straight senior notes in a separate public offering.
The convertibles came at the middle of talk, which was for a 3.5% to 4% coupon and 30% to 35% premium.
The registered convertibles will be non-callable for life, with cash dividend protection of $0.175 per quarter.
Some of the proceeds will be used to repay debt that was assumed in connection with the acquisition of PMA Capital Corp. Remaining proceeds will be used for general corporate purposes, including making additional capital contributions to insurance company subsidiaries that may be necessary.
Morgan Stanley & Co. Inc. and UBS Securities LLC were the joint bookrunners, with co-managers Dowling and Partners Securities LLC, Keefe, Bruyette & Woods Inc., Macquarie Capital (USA) Inc., Raymond James & Associates Inc. and Wunderlich Securities Inc.
Chicago-based Old Republic is an insurance holding company.
| Issuer: | Old Republic International Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $500 million, upsized from $250 million
|
| Greenshoe: | $50 million
|
| Maturity: | March 15, 2018
|
| Bookrunners: | Morgan Stanley & Co. Inc., UBS Securities LLC
|
| Co-managers: | Dowling and Partners Securities LLC, Keefe, Bruyette & Woods Inc., Macquarie Capital (USA) Inc., Raymond James & Associates Inc., Wunderlich Securities Inc.
|
| Coupon: | 3.75%
|
| Price: | Par, $1,000
|
| Yield: | 3.75%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $15.54
|
| Conversion ratio: | 64.3407 shares
|
| Call protection: | Non-callable for life
|
| Puts: | No puts
|
| Price talk: | 3.5%-4%, up 30%-35%
|
| Pricing date: | March 2
|
| Settlement date: | March 8
|
| Distribution: | Registered
|
| Stock symbol: | NYSE: ORI
|
| Stock reference price: | $11.73
|
| Market capitalization: | $3.08 billion
|
© 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.
