By Rebecca Melvin
New York, July 16 - Forest City Enterprises Inc. priced $250 million of seven-year convertible senior notes at par after the market close Monday to yield 3.625% with an initial conversion premium of 35%, according to a syndicate source.
The Rule 144A offering came at the midpoint of talk, which was for a 3.375% to 3.875% coupon and a 32.5% to 37.5% premium.
There is a $50 million over-allotment option.
BofA Merrill Lynch, Barclays, Citigroup Capital Markets Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the joint bookrunners of the deal.
The notes are provisionally callable for five years at par subject to the stock trading at 130% of the conversion price or higher and then are feely callable in the last two years.
If the notes are called in the first five years, investors can get additional shares via a make-whole table.
Proceeds are earmarked to repay the balance of Forest City's 6.5% senior notes due 2017 and other outstanding debt.
Proceeds will be held in an escrow account and invested in short-term, investment-grade, interest-bearing securities, pending their application.
Forest City is a Cleveland-based real estate developer with $10.6 billion in assets.
| Issuer: | Forest City Enterprises Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $250 million
|
| Greenshoe: | $50 million
|
| Maturity: | 2020
|
| Bookrunners: | BofA Merrill Lynch, Barclays, Citigroup Capital Markets Inc., Goldman Sachs & Co., Morgan Stanley & Co. LLC
|
| Coupon: | 3.625%
|
| Price: | Par
|
| Yield: | 3.625%
|
| Conversion premium: | 35%
|
| Conversion price: | $24.21
|
| Conversion ratio: | 41.3129
|
| Call protection: | Non-callable until Aug. 15, 2018 unless shares exceed 130% of conversion price, freely callable thereafter
|
| Puts: | None
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Price talk: | 3.375%-3.875%, up 32.5%-37.5%
|
| Pricing date: | July 15
|
| Settlement date: | July 19
|
| Stock reference price: | $17.93 at close July 15
|
| Stock symbol: | NYSE: FCEA and FCEB
|
| Distribution: | Rule 144A
|
| Market capitalization: | $3.46 billion
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
