By Kenneth Lim
Boston, Oct. 26 - FiberTower Corp. on Wednesday priced $350 million of six-year convertible senior secured notes at talk, with a coupon of 9% and an initial conversion premium of 15%.
The convertibles, which priced after the market closed, were offered at par.
There is an over-allotment option for a further $52.5 million.
Jefferies and Co. was the bookrunner of the Rule 144A offering.
The convertibles will accrue interest on a semi-annual basis, and FiberTower will put enough in escrow to pay the first two years' interest in cash. The company may pay the third and fourth years' interest in the form of additional notes bearing a coupon of 11%. Interest will be payable in cash only after that.
The initial conversion price was set at $8.29 per share, or an initial conversion rate of 120.627 shares per note.
The convertibles are non-callable for the first four years, after which they may be called subject to a 150% hurdle.
The convertibles have anti-dilution protection.
FiberTower, an Iselin, N.J.-based provider of backhaul and access services to communications companies and companies, said part of the proceeds will be used to fund its capital expenditures to expand its existing network footprint and open new markets. The proceeds will also be used to fund the escrow account for the bonds' interest payments.
| Issuer: | FiberTower Corp.
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| Issue: | Convertible senior secured notes
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| Bookrunner: | Jefferies and Co.
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| Amount: | $350 million
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| Greenshoe: | $52.5 million
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| Maturity: | Nov. 15, 2012
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| Coupon: | 9%
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| Price: | Par
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| Yield: | 9%
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| Conversion premium: | 15%
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| Conversion price: | $8.29
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| Conversion ratio: | 120.627
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| Dividend protection: | Yes
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| Call protection: | Non-callable before Nov. 15, 2010, thereafter callable subject to 150% hurdle
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| Price talk: | 9%, up 15%
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| Pricing date: | Oct. 25 after the close
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| Settlement date: | Nov. 9
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| Distribution: | Rule 144A
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