By Rebecca Melvin
New York, Sept. 17 – Alcoa Inc. sold $1.25 billion of three-year mandatory convertible preferred shares with a $50 per share liquidation preference price to yield 5.375% and with a 20% initial conversion premium, according to a pricing sheet.
Pricing of the registered, off-the-shelf deal came toward the cheap end of talk, which was for a 5% to 5.5% dividend and 20% to 25% premium.
There is a $187.5 million greenshoe for the deal that was sold via joint bookrunners Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC.
Proceeds will be used to finance the previously announced proposed acquisition of the Firth Rixson business and to pay related fees. Completion of the offering is not contingent on the acquisition.
The shares will be listed on the New York Stock Exchange under the ticker symbol “AA-PRB.”
Alcoa is a New York-based aluminum producer.
| Issuer: | Alcoa Inc.
|
| Issue: | Mandatory convertible preferred stock
|
| Amount: | $1.25 billion
|
| Greenshoe: | $187.5 million
|
| Maturity: | Oct. 1, 2017
|
| Bookrunners: | Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., J.P. Morgan Securities LLC
|
| Distribution rate: | 5.375%
|
| Price: | Par, $50
|
| Yield: | 5.375%
|
| Premium: | 20%
|
| Maximum settlement rate: | 3.09406
|
| Minimum settlement rate: | 2.57838
|
| Takeover protection: | Yes
|
| Price talk: | 5%-5.5%, up 20%-25%
|
| Pricing date: | Sept. 16
|
| Settlement date: | Sept. 22
|
| Stock symbol: | NYSE: AA
|
| Preferred stock symbol: | NYSE: AA-PRB
|
| Stock reference price: | $16.16
|
| Market capitalization: | $19.01 billion
|
| Distribution: | Registered, off the shelf
|
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