American Water greenshoe ups 3.625% exchangeables to $1.04 billion

By Wendy Van Sickle

Columbus, Ohio, June 29 – Underwriters for American Water Capital Corp.’s 3.625% three-year notes exchangeable for American Water Works Co. Inc.’s common shares fully exercised their $135 million greenshoe, increasing the total deal size to $1,035,000,000, according to an 8-K filing with the Securities and Exchange Commission.

The company priced the initial $900 million of the exchangeables after the market close on Monday at par with an initial exchange premium of 22.5%, as previously reported.

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.

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.

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.

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