By Abigail W. Adams
Portland, Me., May 19 – HCI Group Inc. priced $150 million of convertible notes due 2042 before the market open on Thursday at the cheap end of talk with a coupon of 4.75% and an initial conversion premium of 25%, according to a company news release and a market source.
Price talk was for a coupon of 4.25% to 4.75% and an initial conversion premium of 25% to 30%.
Truist Securities Inc. and JMP Securities LLC were 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 $60 million of net proceeds will be used to repurchase stock at a purchase price of $64.43 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.
| Issuer: | HCI Group Inc.
|
| Amount: | $150 million
|
| Greenshoe: | $22.5 million
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| Issue: | Convertible senior notes
|
| Maturity: | June 1, 2042
|
| Bookrunners: | Truist Securities Inc. and JMP Securities LLC
|
| Coupon: | 4.75%
|
| Price: | Par
|
| Yield: | 4.75%
|
| Conversion premium: | 25%
|
| Conversion price: | $80.54
|
| Conversion rate: | 12.4166
|
| Call options: | Non-callable until June 5, 2025 and then redeemable for cash subject to a 130% hurdle
|
| Put options: | Putable at par on June 1, 2027, June 1, 2032 and June 1, 2037
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| Pricing date: | May 19
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| Settlement date: | May 23
|
| Distribution: | Rule 144A
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| Talk: | Coupon of 4.25% to 4.75% and initial conversion premium of 25% to 30%
|
| Stock symbol: | NYSE: HCI
|
| Stock price: | $64.43 at market close May 18
|
| Market capitalization: | $652 million
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