New York, Dec. 14 - Fleetwood Enterprises, Inc. said it sold $150 million of new convertible trust preferred securities for cash with a yield of 9.5% and an initial conversion premium of 15%. The offering was substantially increased in size from $50 million planned.
The sale is in addition to an exchange offer the Riverside, Calif. recreational vehicle and manufactured housing company is currently conducting for up to $86.25 million of its existing convertible trust preferreds. That is scheduled to terminate on Jan. 4, 2002.
Banc of America Securities was placement agent for the cash offer, acting on a best-efforts basis, and is dealer manager for the exchange.
Commenting on the cash offer, Fleetwood's president and chief executive officer Nelson W. Potter said in a news release: "We were pleased to be able to close the cash offering less than two weeks after we commenced it, in an amount three times greater than the originally announced deal size, and on terms more favorable to Fleetwood. Completing this offering improves our liquidity and operational flexibility."
Fleetwood is currently restructuring its debt, with the exchange and cash offers designed to enhance liquidity and improve its balance sheet by increasing shareholders' equity and increasing its capacity to carry senior debt, according to documents filed with the Securities and Exchange Commission.
The exchange offer convertibles will be sold through a different financing vehicle, Fleetwood Capital Trust II. Otherwise, they will be identical to the cash offer convertibles except that they will have a different conversion price and the liquidation amount will be $22 instead of $50.
They will be exchanged for up to $86.25 million liquidation amount of Fleetwood's existing 6% convertible trust preferred securities due Feb. 15, 2028 issued by Fleetwood Capital Trust.
Holders will receive $22 liquidation amount of new securities for each $50 liquidation amount of the old securities. The new convertibles will be subordinated to the company's senior debt but senior to any of the old convertibles that remain outstanding.
Up to $34.5 million liquidation amount of the new securities will be issued in the exchange.
The exchange offer expires at 5.00 p.m. ET on Jan. 4, 2002.
The exchange is subject to at least $50 million liquidation amount of the old securities being tendered.
The conversion price for the new convertibles will be the higher of either $8.63 or 15% more than the volume-weighted average of the closing prices of Fleetwood's common stock on the five trading days leading up to the fourth trading day before the exchange expires, according to documents filed with the SEC. Those levels were increased from $8.40 per share or 12% previously.
| Issuer: | Fleetwood Capital Trust III
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| Amount: | $150 million
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| Maturity: | Feb. 15, 2013
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| Distribution rate: | 9.5% (Payable in stock before Feb. 15, 2004 at Fleetwood's option)
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| Price: | Par of $50
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| Call: | Beginning Feb. 15, 2004 at 106.333, then at 104.750, 103.167, 101.583, declining to par in 2008 and thereafter
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| Until Feb. 15, 2004, at par if stock trades at more than 200% of conversion price for 20 out of 30 trading days.
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| Initial conversion premium: | 15% (over Tuesday's close of $9.01)
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| Conversion price: | $10.36
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| Settlement: | Dec. 14
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| End
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