Invacare greenshoe ups five-year convertibles to $125 million

By Wendy Van Sickle

Columbus, Ohio, March 16 – Underwriters for Invacare Corp.’s 4.25% five-year convertible notes fully exercised their $15 million greenshoe, increasing the total deal size to $125 million, according to an 8-K filing with the Securities and Exchange Commission.

The company priced $110 million of the convertibles after the market close on Thursday at par at the cheap end of talk with an initial conversion premium of 27.5%, as previously reported.

Price talk was for a coupon of 3.75% to 4.25% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Morgan Stanley & Co. LLC was the bookrunner for the Rule 144A offering.

The notes are non-callable until March 20, 2024 and then subject to a 130% hurdle.

They are putable upon a fundamental change.

The notes will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company entered into capped call transactions with a cap price of $16.58, which represents a premium of 100% over the last reported sales price of stock.

Net proceeds are expected to be $120.3 million.

Approximately $18.8 million will be used to cover the call spread and $79.9 million of net proceeds will be used to repurchase its 4.5% convertible notes due 2022 in open market or privately negotiated transactions or repay them at maturity.

Remaining proceeds will be used for general corporate purposes.

Invacare is an Elyria, Ohio-based medical equipment manufacturer.

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