Ferro greenshoe fully exercised, lifts 6.5% five-year convertibles to $172.5 million

By Devika Patel

Knoxville, Tenn., Aug. 27 - Underwriters for Ferro Corp.'s 6.5% five-year convertible senior notes exercised their over-allotment option in full for $22.5 million more of the convertibles, increasing the size of the issue to $172.5 million, the company said in press release.

As previously reported, the company sold the convertibles at par on Aug. 13 in a registered shelf offering via joint bookrunners Citigroup Global Markets, Credit Suisse Securities and J.P. Morgan Securities Inc.

The bonds have a conversion premium of 60% and a conversion price of $32.34, which equals a conversion ratio of 30.9253.

The convertibles are non-callable for life, and there are no puts, except for a fundamental change-of-control put.

The convertibles will have dividend protection in the form of a standard conversion ratio adjustment. There is also contingent conversion at a stock price trigger of 130% and a parity trigger of 97%.

In addition, if the company's stock exceeds the conversion price during an averaging period, holders will receive up to an additional 18.5552 shares, with the exact amount to be set by a formula.

Proceeds will be used to purchase or redeem all of the company's outstanding 9 1/8% senior notes due 2009, to pay accrued and unpaid interest, to pay all premiums and transaction expenses and for general corporate purposes.

The tender offer and consent solicitation in connection with the purchase of the 9 1/8% senior notes is expected to occur on the Aug. 19 date set for the closing of the offering.

Ferro is a Cleveland-based supplier of specialty materials and chemicals for makers of electronics, solar energy, telecom, pharmaceutical, building, automotive and other household and industrial products.

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