Healthways' 1.5% convertibles increased to $150 million via greenshoe

By Angela McDaniels

Tacoma, Wash., July 16 - Healthways Inc. said the underwriters for its 1.5% convertible senior notes due 2018 exercised their $25 million over-allotment option in full, increasing the size of the issue to $150 million.

As previously reported, the company priced an upsized $125 million of the convertibles at par with an initial conversion premium of 20% on July 8.

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 bonds are non-callable and have contingent conversion if the company's shares rise to 130% of the conversion price. They have dividend protection via a make-whole table, and they have takeover protection.

The company used $3.6 million of the greenshoe proceeds to pay the cost of amendments made to its cash convertible note hedge transactions. The remainder of the proceeds of the issue will be used to reduce the outstanding debt under the company's credit facility and/or for general corporate purposes, including acquisitions, strategic partnerships and expansion strategies.

Healthways is a Nashville-based provider of well-being improvement solutions.

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