By Kenneth Lim
Boston, July 13 - Forest City Enterprises, Inc. priced an upsized $300 million offering of seven-year convertible senior notes on Wednesday at the cheap end of talk, to yield 4.25% with an initial conversion premium of 20%.
The notes were offered at par, and will be convertible into the company's class A shares.
Price talk was at a coupon of 3.75% to 4.25% and an initial conversion premium of 20% to 25%.
The size of the deal was originally $250 million. An over-allotment option remains at $50 million.
Goldman Sachs & Co., Barclays Capital Inc., Merrill Lynch and Morgan Stanley & Co. Inc. were the bookrunners of the Rule 144A offering.
Conversion may be terminated after three years if the underlying stock exceeds 130% of the conversion price, but holders will be made whole.
The notes will have standard dividend and takeover protection.
Proceeds will be used to reduce existing debt, including $46.9 million of Forest City's Puttable Equity-Linked senior notes due 2011, a $450 million revolver and certain mortgage debt. The proceeds will also be used for general corporate purposes.
Forest City is a Cleveland-based real estate developer.
| Issuer: | Forest City Enterprises, Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Goldman Sachs & Co., Barclays Capital Inc., Merrill Lynch and Morgan Stanley & Co. Inc.
|
| Amount: | $300 million
|
| Greenshoe: | $50 million
|
| Maturity: | Aug. 15, 2018
|
| Coupon: | 4.25%
|
| Price: | Par
|
| Yield: | 4.25%
|
| Conversion premium: | 20%
|
| Conversion price: | $21.67
|
| Conversion ratio: | 46.1425
|
| Soft call: | Conversion may be terminated after Aug. 15, 2014 if stock trades above 130% of conversion price, subject to make-whole
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Price talk: | 3.75% to 4.25%, up 20% to 25%
|
| Pricing date: | July 13
|
| Settlement date: | July 19
|
| Distribution: | Rule 144A
|
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