By Rebecca Melvin
New York, Dec. 9 – Harmonic Inc. priced $125 million of five-year convertible senior notes at par after the market close on Tuesday to yield 4% with an initial conversion premium of 28%, according to a news release.
The Rule 144A notes priced through the cheap end of talk, which was for a 2.75% to 3.25% coupon and a 37.5% to 42.5% premium.
BofA Merrill Lynch was the bookrunner of the deal, which has an $18.75 million greenshoe.
The notes are non-callable and will be convertible into cash, shares or a combination at Harmonic’s election.
About $70 million of the proceeds will be used to pay a portion of the costs associated with its previously announced acquisition of Thomson Video Networks SAS.
Harmonic is also using $50 million of the proceeds to repurchase shares from purchasers of the notes in privately negotiated transactions effected through the initial purchaser or its affiliate concurrently with the offering. That amount was up from $25 million of share repurchases that were initially expected.
Harmonic may use a portion of the proceeds from the greenshoe to repurchase additional shares of its common stock under its existing share repurchase program. Any remaining proceeds will be used for working capital and general corporate purposes.
Harmonic is a San Jose, Calif.-based is video infrastructure products maker.
| Issuer: | Harmonic Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $125 million
|
| Greenshoe: | $18.75 million
|
| Maturity: | Dec. 1, 2020
|
| Bookrunner: | BofA Merrill Lynch
|
| Coupon: | 4%
|
| Price: | Par
|
| Yield: | 4%
|
| Conversion premium: | 28%
|
| Conversion price: | $5.75
|
| Conversion ratio: | 173.9978 shares
|
| Calls: | Non-callable
|
| Net share settlement: | Yes
|
| Price talk: | 2.75%-3.25%, up 37.5%-42.5%
|
| Pricing date: | Dec. 8
|
| Settlement date: | Dec. 14
|
| Stock symbol: | Nasdaq: HLIT
|
| Stock reference price: | $4.49, as of close Dec. 8
|
| Market capitalization: | $390 million
|
| Distribution: | Rule 144A
|
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