Forest City greenshoe exercised, lifting convertibles to $350 million

By Devika Patel

Knoxville, Tenn., July 19 - Underwriters for Forest City Enterprises, Inc.'s offering of 4.25% seven-year convertible senior notes exercised their over-allotment option in full for $50 million more of the convertibles, increasing the size of the issue to $350 million, the company said in an 8-K filed Tuesday with the Securities and Exchange Commission.

As previously reported, the company sold the convertibles at par on July 13 in a Rule 144A offering via bookrunners Goldman Sachs & Co., Barclays Capital Inc., Bank of America Merrill Lynch and Morgan Stanley & Co. Inc.

The convertibles have an initial conversion premium of 20% and an initial conversion price of $21.67, which equals a conversion ratio of 46.1425.

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 putable 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.

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