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Fluor greenshoe exercised, ups six-year convertibles to $575 million
By William Gullotti
Buffalo, N.Y., Aug. 11 – Underwriters for Fluor Corp.’s offering of $500 million of 1.125% six-year convertible notes exercised in full their $75 million greenshoe on Thursday to increase the total issue size to $575 million, according to a form 8-K filed on Friday with the Securities and Exchange Commission.
The initial offering was priced after the market close on Monday at par at the rich end of talk with an initial conversion premium of 32.5%.
As previously reported, initial conversion rate is 22.042 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $45.37 per share of common stock
BofA Securities Inc., Citigroup Global Markets Inc., BNP Paribas Securities Corp. and Wells Fargo Securities LLC were bookrunners for the Rule 144A offering.
As previously reported, the notes are non-callable until Aug. 20, 2026 and then subject to a 130% hurdle. They are also 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.
With the greenshoe fully exercised, Fluor’s net proceeds will be $559.4 million.
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.
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.
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