By Kenneth Lim
Boston, April 25 - AirTran Holdings Inc. priced $65 million of seven-year convertible senior notes on Thursday after the market closed at the cheap end of talk to yield 5.5% with an initial conversion premium of 20%.
The convertibles were offered at par and talked at a coupon of 5% to 5.5% and an initial conversion premium of 20% to 25%.
There is an over-allotment option for a further $9.75 million.
Morgan Stanley & Co. Inc. was the bookrunner of the registered shelf offering.
There was an upsized concurrent common stock offering of 22,312,500 common shares priced at $3.20 per share for a total of $71.4 million. The stock offering has a greenshoe for an additional 3,346,900 common shares, or $10.71 million. The original stock offering was for 14.25 million common shares and a greenshoe for an additional 2,137,500 common shares.
The notes are non-callable and may not be put.
The notes have dividend and takeover protection.
AirTran, an Orlando, Fla.-based airline, said it will place part of the proceeds from the notes offering into an escrow account to fund the first six interest payments. The rest of the proceeds will be used for general corporate purposes, which may include working capital, capital expenditures, debt retirement and strategic investments.
| Issuer: | AirTran Holdings Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $65 million
|
| Greenshoe: | $9.75 million
|
| Maturity: | April 15, 2015
|
| Bookrunner: | Morgan Stanley & Co. Inc.
|
| Coupon: | 5.5%
|
| Price: | Par
|
| Yield: | 5.5%
|
| Conversion premium: | 20%
|
| Conversion price: | $3.84
|
| Conversion ratio: | 260.417
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | 5%-5.5%, up 20%-25%
|
| Pricing date: | April 24, after the close
|
| Settlement date: | April 30
|
| Distribution: | Registered
|
| Stock symbol: | NYSE: AAI
|
| Stock price: | $3.20 at close April 24
|
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