Headwaters $150 million quick-sale convertible talked at 2.625%-3.125%, up 40%-45%

By Ronda Fears

Nashville, May 25 - Headwaters Inc. on Tuesday launched a quick-sale of $150 million of 12-year convertible notes talked to yield 2.625% to 3.125% with a 40% to 45% initial conversion premium.

Morgan Stanley & Co. Inc. is bookrunner of the Rule 144A deal, which was set to price after the close Tuesday.

The senior subordinated notes will be non-callable for three years and then with a 130% trigger in years four through seven. There is a put in year seven, as well.

There also is a 130% contingent conversion trigger and 120% contingent payment trigger.

A $22.5 million greenshoe is available.

The South Jordan, Utah-based energy services firm plans to use proceeds, together with borrowings from its senior secured credit facility and internally generated funds, to finance its previously announced $202 million acquisition of Eldorado Stone LLC. In the event the acquisition does not close, Headwaters intends to use proceeds for general corporate purposes, including other potential acquisitions.

Headwaters announced the Eldorado acquisition on April 21, anticipating that Eldorado, which makes architectural manufactured stone, would use its fly ash for those products. The company said at that time it was considering a convertible offering.

The company obtained a new senior secured credit facility on March 31 consisting of a $50 million term loan due November 2007 and a $50 million revolver - both with an initial interest rate of Libor plus 225 basis points. Headwaters used the term loan and about $20 million of existing cash to repay senior debt that carried an interest rate of Libor plus 425 basis points.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.