By Rebecca Melvin
New York, Nov. 22 - Forestar Group Inc. sold $135 million of three-year mandatory tangible equity units, or 5.4 million units at $25.00 par, which have a distribution rate of 6% and an initial conversion premium of 20%, according to a pricing term sheet.
The units priced at the midpoint of the talked 5.75% to 6.25% distribution rate and 17.5% to 22.5% premium.
The registered, off-the-shelf units have a $15 million greenshoe.
Goldman Sachs & Co. was the bookrunning manager.
Proceeds were expected to be used for general corporate purposes, including investments in strategic growth opportunities.
The equity units consist of a prepaid contract to purchase Forestar common stock and an amortizing note. The stock purchase contract will automatically settle on Dec. 15, 2016 for common stock between 1.0913 and 1.3095 shares. The notes will pay equal quarterly cash installments of $0.3750 per note and will have a final payment on Dec. 15, 2016.
Austin, Texas-based Forestar is a real estate, mineral and fiber resources company.
| Issuer: | Forestar Group Inc.
|
| Issue: | Tangible equity units
|
| Amount: | $135 million (5.4 million units)
|
| Greenshoe: | $15 million (600,000 units)
|
| Maturity: | Dec. 15, 2016
|
| Bookrunners: | Goldman Sachs & Co.
|
| Co-managers: | KeyBanc Capital Markets Inc., JMP Securities LLC, Capital One Securities, Inc., J.P. Morgan Securities LLC, D.A. Davidson & Co., UBS Securities LLC
|
| Distribution rate: | 6%
|
| Price: | $25.00
|
| Premium: | 20%
|
| Threshold appreciation price: | $22.9080
|
| Maximum settlement rate: | 1.3095
|
| Minimum settlement rate: | 1.0913
|
| Price talk: | 5.75%-6.25%, up 17.5%-22.5%
|
| Takeover protection: | Yes
|
| Pricing date: | Nov. 21
|
| Settlement date: | Nov. 27
|
| Stock symbol: | NYSE: FOR
|
| Stock reference price: | $19.09 as of close Nov. 21
|
| Market capitalization: | $661.6 million
|
| Distribution: | Registered, off the shelf
|
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