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Laureate agrees to issue stock in exchange for 9¼% notes due 2019
By Susanna Moon
Chicago, April 27 – Laureate Education Inc. agreed to issue stock in exchange for $250 million principal amount of 9¼% senior notes due 2019, according to an 8-K filing with the Securities and Exchange Commission.
Laureate entered into separate privately negotiated note exchange agreements with holders on April 15 to exchange the notes for shares of the company’s class A common stock by Feb. 7, 2018, which is about a year after the company’s initial public offering.
The number of shares issuable in the exchange will be 104.625% of par, or about $261.6 million, divided by $14.00, the IPO price per share.
The company said that on April 21, to help effect the exchange, the company entered into confirmation letters with the exchanging holders to complete the exchange of the notes for substantially identical but non-redeemable notes issued under a new indenture.
Interest on the non-redeemable exchange notes due Sept. 1, 2019 will be paid semiannually at an annual rate of 9¼% plus another 75 basis points as special interest.
After the note exchange, the company will issue to holders 18,683,036 shares of the company’s class A common stock and pay cash for accrued interest and special interest.
As reported, Laureate priced $800 million of eight-year senior notes at par on April 21 to yield 8¼%.
The company said it will use proceeds from the new issue, along with those from the IPO and term loan, to redeem its 9¼% notes but not its non-redeemable exchange notes, to repay or refinance the company’s term and to repay the seller notes used to partially finance the acquisition of FMU Group at maturity in September 2017.
Laureate is a Baltimore-based network of degree-granting higher education institutions.
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