By Kenneth Lim
Boston, Dec. 15 - International Game Technology Inc. on Thursday priced $825 million of 30-year convertible senior debentures at the cheap end of talk, at a coupon of 2.6% and an initial conversion premium of 35%, and reoffered at 98.625.
The debentures were originally offered at par, and talked at a coupon of 2.1% to 2.6% and an initial conversion premium of 35% to 40%.
There is an over-allotment option for a further $75 million.
Banc of America, Merrill Lynch, Goldman Sachs, Wachovia, UBS Investment Bank, Deutsche Bank and Bear Stearns were the bookrunners for the Rule 144A offering.
The debentures are non-callable for the first three years. They may be put in years three, five, 10, 15, 20 and 25.
The debentures have a contingent conversion hurdle at 130% of the conversion price and contingent payment at 120%.
The convertibles have dividend and takeover protection.
There is a net-share settlement feature.
International Game, a Reno, Nev.-based maker of gaming machines and systems, said it will use about $612 million of the proceeds and cash on hand to redeem its outstanding zero-coupon convertible debentures. It will also use about $225 million of the proceeds and cash on hand to concurrently buy back its common stock.
| Issuer: | International Game Technology Inc.
|
| Issue: | Convertible senior debentures
|
| Bookrunner: | Banc of America, Merrill Lynch, Goldman Sachs, Wachovia, UBS Investment Bank, Deutsche Bank and Bear Stearns
|
| Amount: | $825 million
|
| Greenshoe: | $75 million
|
| Maturity: | Dec. 15, 2036
|
| Coupon: | 2.6%
|
| Price: | Par, reoffered at 98.625
|
| Yield: | 2.6%
|
| Conversion premium: | 35%
|
| Conversion price: | $61.78
|
| Conversion ratio: | 16.1875
|
| Contingent conversion: | 130%
|
| Contingent payment: | 120%
|
| Net-share settlement option: | Yes
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable before Dec. 20, 2009
|
| Puts: | Dec. 15, 2009; Dec. 15, 2011; Dec. 15, 2016; Dec. 15, 2021; Dec. 15, 2026; Dec. 15, 2031
|
| Price talk: | 2.1%-2.6%, up 35%-40%
|
| Pricing date: | Dec. 14 after the close
|
| Settlement date: | Dec. 20
|
| Distribution: | Rule 144A
|
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