By Rebecca Melvin
New York, July 2 - Healthways Inc. priced an upsized $125 million of five-year convertible senior notes at par to yield 1.5% with an initial conversion premium of 20% on Monday, according to a syndicate source.
There is an over-allotment option for $25 million.
Initially the Rule 144A offering was talked at $100 million in size with a $15 million over-allotment option.
Pricing came at the midpoint of talk, which was for a 1.25% to 1.75% coupon and 17.5% to 22.5% premium.
The deal was brought by joint active bookrunner J.P. Morgan Securities LLC and passive bookrunners SunTrust Robinson Humphrey Inc. and Morgan Stanley & Co. LLC.
The company entered into convertible note hedge and warrant transactions with one or more initial purchasers of the bonds.
The bonds are non-callable and have contingent conversion if shares rise to 130% of the conversion price. They have dividend protection via a make-whole table, and they have takeover protection.
Proceeds will be used to reduce the company's credit agreement debt and for general corporate purposes, including acquisitions, strategic partnerships and expansion strategies, as well as to pay the cost of the hedge transactions.
Healthways is a Nashville-based provider of well-being improvement solutions.
| Issuer: | Healthways Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $125 million, upsized from $100 million
|
| Greenshoe: | $25 million, upsized from $15 million
|
| Maturity: | July 1, 2018
|
| Bookrunners: | J.P. Morgan Securities LLC (active), SunTrust Robinson Humphrey Inc. and Morgan Stanley & Co. LLC (passive)
|
| Coupon: | 1.5%
|
| Price: | Par, $1,000
|
| Yield: | 1.5%
|
| Conversion premium: | 20%
|
| Conversion price: | $19.46
|
| Conversion ratio: | 51.3769
|
| Call: | Non-callable
|
| Put: | No
|
| Contingent conversion: | Yes, at 130%
|
| Dividend protection: | Yes, via make-whole table
|
| Takeover protection: | Yes
|
| Call spread: | Yes
|
| Price talk: | 1.25%-1.75%, up 17.5%-22.5%
|
| Pricing date: | July 1
|
| Settlement date: | July 8
|
| Stock symbol: | Nasdaq: HWAY
|
| Stock reference price: | $16.22
|
| Distribution: | Rule 144A
|
| Market capitalization: | $543.8 million
|
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