By Ronda Fears
Nashville, Jan. 24 - International Game Technology sold an upsized $500 million in proceeds of 30-year 0% convertible senior notes and a source familiar with the Rule 144A overnighter said final terms were cheapened early Friday.
Late Thursday, the source said final terms were set at an issue price of 63.87 for a 1.5% yield to maturity and 47.5% initial conversion premium, at the middle of guidance.
However, early Friday the source said a decision was made to cheapen it, lowering the issue price to 59.29 for a yield to maturity of 1.75% and initial conversion premium of 45%, putting it at the cheap end of price talk.
"It was certainly within their rights to do this," the source said. "But we all did think that it had been decided Thursday night."
IGT said it will use about $137 million of the proceeds to repurchase common stock under its share repurchase program, simultaneous with the convertible offering. Remaining proceeds will be used for general corporate purposes, which may include acquisitions, repurchases of outstanding senior notes or further repurchases of common stock.
Final terms of the new deal are:
| Issuer: | International Game Technology
|
| Amount: | $500 million (proceeds), up from $400 million (proceeds)
|
| Greenshoe: | $75 million (proceeds), up from $60 million (proceeds)
|
| Lead manager: | Goldman Sachs
|
| Maturity date: | Feb. 2, 2033
|
| Coupon: | 0%
|
| Issue price: | 59.29
|
| Yield to maturity: | 1.75%
|
| Conversion premium: | 47.5%
|
| Conversion price: | $112.027
|
| Conversion ratio: | 5.2926
|
| Call: | Non-callable for three years
|
| Put: | In years three, five, 10, 15, 20 and 25
|
| Contingent conversion: | 120%
|
| Contingent payment: | 60%
|
| Ratings: | Moody's: Baa3 (expected)
|
| S&P: BBB-
|
| Pricing date: | Jan. 23
|
| Settlement date: | Jan. 29
|
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