By Rebecca Melvin
New York, Nov. 3 - Ford Motor Co. priced an upsized $2.5 billion of seven-year convertible notes after the close of markets on Tuesday to yield 4.25%, with an initial conversion premium of 25%, according to a syndicate source.
The registered offering, which was originally going to be $2 billion in size, priced at the midpoint of talk, which was for a coupon of 4% to 4.5% and an initial conversion premium of 22.5% to 27.5%.
There is a 15% greenshoe of $375 million, upsized from $300 million.
Joint bookrunners were Citigroup, Bank of America Merrill Lynch, J.P. Morgan, Barclays Capital, Deutsche Bank, Goldman Sachs, Morgan Stanley and RBS. BNP Paribas and HSBC were also included in the underwriting syndicate.
Ford also plans to sell up to $1 billion of common stock under an equity distribution agreement with certain broker/dealers. These sales are expected to begin in December and to be conducted over a several-month period.
The senior unsecured convertibles are non-callable for five years, and after that Ford may terminate conversion rights or call the bonds if its stock price is more than 130% of the conversion price.
There are no puts.
There is standard dividend protection, contingent conversion at a 130% stock price trigger and standard takeover protection. Conversion will be settled via, cash, stock or a combination.
Proceeds from the convertible offering will be used for general corporate purposes.
Ford is a car and truck maker based in Dearborn, Mich.
| Issuer: | Ford Motor Co.
|
| Issue: | Convertible senior unsecured notes
|
| Amount: | $2.5 billion, upsized from $2 billion
|
| Greenshoe: | $375 million, upsized from $300 million
|
| Maturity: | Nov. 15, 2016
|
| Bookrunners: | Citigroup, Bank of America Merrill Lynch, J.P. Morgan, Barclays Capital, Deutsche Bank, Goldman Sachs, Morgan Stanley, RBS, BNP Paribas and HSBC
|
| Coupon: | 4.25%
|
| Price: | Par, $1,000
|
| Yield: | 4.25%
|
| Conversion premium: | 25%
|
| Conversion price: | $9.30
|
| Conversion ratio: | 107.5269
|
| Call protection: | Non-callable for five years, then Ford may terminate conversion rights or call the bonds if its stock price is more than 130% of the conversion price
|
| Puts: | No puts
|
| Price talk: | 4%-4.5%, up 22.5%-27.5%
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Pricing date: | Nov. 3
|
| Settlement: | Nov. 9 |
|
| Distribution: | Registered
|
| Stock symbol: | F
|
| Stock reference price: | $7.44
|
| Market capitalization: | $23.97 billion
|
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