HCI Group talks $150 million convertible notes due 2042 to yield 4.25%-4.75%, up 25%-30%

By Abigail W. Adams

Portland, Me., May 18 – HCI Group Inc. plans to price $150 million of convertible notes due 2042 before the market open on Thursday with price talk for a coupon of 4.25% to 4.75% and an initial conversion premium of 25% to 30%, according to a market source.

Truist Securities Inc. and JMP Securities LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $22.5 million.

The notes are non-callable until June 5, 2025 and are then redeemable for cash subject to a 130% hurdle.

The convertibles are putable at par on June 1, 2027, June 1, 2032 and June 1, 2037.

Concurrently with the pricing of the notes, the company will enter into a prepaid forward stock purchase contract with Societe Generale.

Approximately 40% of net proceeds will be used to repurchase stock with remaining proceeds to be used for general corporate purposes.

HCI is a Tampa, Fla.-based holding company focused on insurance, real estate and information technology.

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