By Evan Weinberger
New York, July 17 - Health Care REIT, Inc. priced an upsized $400 million in convertible senior notes due July 15, 2027 with a 4.75% coupon and an initial conversion premium of 23.76% Tuesday before the market open. The issue was increased from the planned amount of $350 million.
The bonds were offered at par and reoffered at 98.25, in line with talk. The coupon and initial conversion premium also matched talk.
UBS Investment Bank and Banc of America Securities are joint bookrunners of the registered transaction, with UBS serving as the stabilization agent. There is a $60 million over-allotment option, representing 15% of the offering.
The bonds have an initial conversion price of $50 and a conversion ratio of 20, subject to a 120% contingent conversion trigger. They are convertible into cash and common stock of Health Care REIT according to a net share settlement formula.
The bonds are callable beginning July 15, 2012 at par plus accrued interest, payable in cash. There are put options on July 15 in each of 2012, 2017 and 2022.
There are dividend and takeover protections, as well as an anti-dilution adjustment built in.
Health Care REIT is a Toledo, Ohio-based self-administered, equity real estate investment trust that specialized in senior housing and hospitals. The trust intends to use the proceeds to invest in more health care and senior housing properties, and to repay debt under the company's unsecured line of credit arrangements.
Issuer: Health Care REIT, Inc.
Issue: Convertible senior notes
Amount: $400 million
Greenshoe: $60 million
Maturity: July 15, 2027
Coupon: 4.75%
Price: Par
Reoffer price: 98.25
Yield: 4.75%
Conversion price: $50
| Conversion ratio: | 20
|
| Conversion premium: | 23.76%
|
| Contingent conversion: | 120%
|
| Call: | Beginning July 15, 2012 at par plus accrued interest
|
| Put: | July 15 in each of 2012, 2017 and 2022
|
| Pricing date: | July 16
|
| Settlement date: | July 20
|
| Bookrunners: | UBS Investment Bank and Banc of America Securities
|
| Stabilization agent: | UBS Investment Bank
|
| Distribution: | Registered
|
| Talk: | 4.75% coupon, 23.76% conversion premium, 98.25 reoffer price
|
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