By Rebecca Melvin
New York, Feb. 20 - Forestar Group Inc. priced $110 million of seven-year convertible senior notes after the market close Wednesday at par to yield 3.75% with an initial conversion premium of 37.5%, according to a syndicate source.
The registered, off-the-shelf offering priced at the midpoint of 3.5% to 4% coupon talk and at the rich end of 32.5% to 37.5% premium talk.
The deal has a $15 million greenshoe and was sold via bookrunner Goldman Sachs & Co.
The notes are non-callable with full dividend protection in the form of a conversion rate adjustment and takeover protection.
The Austin, Texas-based real estate, mineral and fiber resources company said it will use the proceeds to repay outstanding borrowings under its revolving line of credit and for general corporate purposes, including investments in oil and gas exploration, drilling, real estate acquisition and development.
| Issuer: | Forestar Group Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $110 million
|
| Greenshoe: | $15 million
|
| Maturity: | March 1, 2020
|
| Bookrunner: | Goldman Sachs & Co.
|
| Co-managers: | KeyBank Capital Markets Inc., JMP Securities LLC, Capital One Southcoast Inc., J.P. Morgan Securities LLC, UBS Securities LLC
|
| Coupon: | 3.75%
|
| Price: | Par
|
| Yield: | 3.75%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $24.49
|
| Calls: | Non-callable
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes, conversion rate adjustment
|
| Price talk: | 3.5%-4%, up 32.5%-37.5%
|
| Pricing date: | Feb. 20
|
| Stock symbol: | NYSE: FOR
|
| Stock price: | $17.81 at close Feb. 20
|
| Distribution: | Registered, off the shelf
|
| Market capitalization: | $613.96 million
|
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