By Abigail W. Adams
Portland, Me., Aug. 8 – Fluor Corp. priced $500 million of six-year convertible notes after the market close on Monday at par at the rich end of talk with a coupon of 1.125% and an initial conversion premium of 32.5%, according to a market source and a company news release.
Price talk was for a coupon of 1.125% to 1.625% and an initial conversion premium of 27.5% to 32.5%.
BofA Securities Inc., Citigroup Global Markets Inc., BNP Paribas Securities Corp. and Wells Fargo Securities LLC were bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.
The notes are non-callable until Aug. 20, 2026 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
The notes will be settled in cash up to the principal amount with any remainder to be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company entered into capped call transactions with a strike price of $68.48, which represents a premium of 100% over the last reported sales price of stock.
Net proceeds are expected to be $486.3 million or $559.4 million if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the call spread and fund the tender for any and all outstanding 3.5% senior notes due 2024.
Fluor is an Irving, Tex.-based engineering construction company.
| Issuer: | Fluor Corp.
|
| Securities: | Convertible senior notes
|
| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | Aug. 15, 2029
|
| Bookrunners: | BofA Securities Inc., Citigroup Global Markets Inc., BNP Paribas Securities Corp. and Wells Fargo Securities LLC
|
| Coupon: | 1.125%
|
| Price: | Par
|
| Yield: | 1.125%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $45.37
|
| Conversion rate: | 22.042
|
| Call options: | Non-callable until Aug. 20, 2026 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Aug. 7
|
| Settlement date: | Aug. 10
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 1.125% to 1.625% and an initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | NYSE: FLR
|
| Stock price: | $34.24 at market close Aug. 7
|
| Market capitalization: | $4.9 billion
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