By Kenneth Lim
Boston, May 28 - Alliance Data Systems Corp. priced $300 million of five-year senior unsecured convertible notes on Wednesday after the markets closed cheaper than price talk to yield 4.75% with an initial conversion premium of 18%.
Price talk was for a coupon of 3.75% to 4.25%, and price talk for the initial conversion premium was 20% to 25%.
There is an over-allotment option for an additional $45 million in the Rule 144A deal.
Barclays Capital Inc., J.P. Morgan Securities Inc. and Bank of America-Merrill Lynch are bookrunners.
Proceeds and related warrant transactions will be used to buy back about $74.9 million of Alliance common stock, to pay for about $44.1 million in costs for convertible note hedge transactions and for general corporate purposes, which may include repaying outstanding revolving debt.
The stock repurchase will be part of the company's previously announced stock repurchase program and will be paid for concurrently with the issuance of notes, under the terms of prepaid forward transactions entered into in connection with the offering of notes.
Alliance is a Dallas-based marketing services company.
| Issuer: | Alliance Data Systems Corp.
|
| Issue: | Convertible senior unsecured notes
|
| Bookrunners: | Barclays Capital Inc., Bank of America-Merrill Lynch, J.P. Morgan Securities Inc.
|
| Amount: | $300 million
|
| Greenshoe: | $45 million
|
| Maturity: | May 15, 2014
|
| Coupon: | 4.75%
|
| Price: | Par
|
| Yield: | 4.75%
|
| Conversion premium: | 18%
|
| Conversion price: | $47.57
|
| Conversion ratio: | 21.0235
|
| Contingent conversion: | 130%
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | 3.75%-4.25%, up 20%-25%
|
| Pricing date: | May 27, after the close
|
| Distribution: | Rule 144A
|
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