By Abigail W. Adams
Portland, Me., June 27 – American Water Capital Corp. priced $900 million of three-year notes exchangeable for American Water Works Co. Inc.’s common shares after the market close on Monday at par with a coupon of 3.625% and an initial exchange premium of 22.5%, according to a company news release.
Pricing came at the midpoint of talk for a coupon of 3.375% to 3.875% and at the cheap end of talk for an initial exchange premium of 22.5% to 27.5%, according to a market source.
J.P. Morgan Securities LLC and Mizuho Securities USA Inc. were bookrunners for the Rule 144A offering, which carries a greenshoe of $135 million.
The notes are non-callable.
They are putable upon a fundamental change.
The notes will be settled in cash up to the principal amount with any remainder to be settled in cash, shares or a combination of both at the company’s option.
Net proceeds are expected to be $888.8 million assuming no exercise of the greenshoe.
Proceeds will be used to repay the company’s commercial paper and for general corporate purposes.
American Water Capital is a finance subsidiary of American Water Works, a Camden, N.J-based water and wastewater utility.
| Issuer: | American Water Capital Corp.
|
| Exchange entity: | American Water Works Co. Inc.
|
| Amount: | $900 million
|
| Greenshoe: | $135 million
|
| Issue: | Exchangeable notes
|
| Maturity: | June 15, 2026
|
| Bookrunners: | J.P. Morgan Securities LLC and Mizuho Securities USA Inc.
|
| Coupon: | 3.625%
|
| Price: | Par
|
| Yield: | 3.625%
|
| Exchange premium: | 22.5%
|
| Exchange price: | $171.78
|
| Exchange rate: | 5.8213
|
| Call options: | Non-callable
|
| Put options: | Upon a fundamental change
|
| Pricing date: | June 26
|
| Settlement date: | June 29
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 3.375% to 3.875% and initial exchange premium of 22.5% to 27.5%
|
| Stock symbol: | NYSE: AWK
|
| Stock price: | $140.23 at market close June 26
|
| Market capitalization: | $27.29 billion
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