By Ronda Fears
Nashville, July 9 - Fairfax Financial Holdings Ltd. sold $150 million of 20-year convertible notes at par to yield 5.0% with a 45% initial conversion premium, via lead manager Banc of America Securities.
The Rule 144A issue sold at the cheap end of price talk.
The deal is being sold on swap, as the company said it would use up to $20 million of proceeds to pay for subordinate voting shares purchased contemporaneously with the offering.
Remaining proceeds will be used for general corporate purposes, including particularly investing in cash, short-term investments and marketable securities and repurchasing or repaying debt. In addition, Fairfax said it may use a portion of proceeds to purchase additional subordinate voting shares in the future.
Terms of the new deal are:
Issuer: Fairfax Financial Holdings Ltd.
| Issue: | Convertible senior subordinated notes
|
| Lead manager: | | Banc of America Securities
|
| Amount | $150 million
|
| Greenshoe: | $40 million
|
| Maturity: | July 15, 2023
|
| Coupon: | 5.0%
|
| Price: | par
|
| Yield: | 5.0%
|
| Conversion premium: | 45%
|
| Conversion price: | $212.512
|
| Conversion ratio: | 4.7056
|
| Call: | Non-callable for 5 years with 100% premium threshold
|
| Put: | In years 5, 10 and 15
|
| Contingent conversion: | 120%
|
| Expected ratings: | Moody's: Ba3
|
| S&P: BB
|
| Price Talk: | 4.5-5.0%, up 45-50%
|
| Pricing Date: | July 8, after the close
|
| Settlement: | July 15
|
| Distribution: | Rule 144A
|
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