By Ronda Fears
Nashville, July 18 - Alloy Inc. sold an upsized $65 million of 20-year convertible notes at par to yield 5.375% with a 25% initial conversion premium, via lead manager Lehman Brothers.
The Rule 144A deal, upsized from $60 million, sold at the cheap end of guidance which put the yield at 4.875% to 5.375% with a 25% to 30% initial conversion premium.
Holders will have dividend protection in the way of a conversion ratio adjustment.
The marketing company said it would use a signification portion of proceeds for acquisitions, potentially in both merchandising and sponsorship businesses, and for working capital, capital expenditures and general corporate purposes.
Terms of the new deal are:
Issuer: Alloy Inc.
| Issue: | Convertible senior debentures
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| Lead manager: | | Lehman Brothers
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| Amount | $65 million, up from $60 million
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| Greenshoe: | $12 million
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| Maturity: | July 17, 2023
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| Coupon: | 5.375%
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| Price: | Par
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| Yield: | 5.375%
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| Conversion premium: | 25%
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| Conversion price: | $8.38
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| Conversion ratio: | 119.403
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| Call: | Non-callable for 5 years
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| Put: | In years 5, 10 and 15
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| Contingent conversion: | 110%
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| Price talk: | 4.875-5.375%, up 25-30%
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| Pricing date: | July 17, after the close
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| Settlement: | July 23
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| Distribution: | Rule 144A
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