LGI greenshoe exercised, increases 4.25% convertibles to $85 million

By Marisa Wong

Madison, Wis., Nov. 26 – LGI Homes Inc. issued an additional $10 million of its 4.25% convertible notes due 2019 through the exercise of an over-allotment option on Nov. 26, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, LGI Homes priced $75 million of five-year convertible notes after the market close on Nov. 17 at par to yield 4.25% with an initial conversion premium of 30%.

Pricing of the Rule 144A deal came at the cheap end of talk, which was 3.75% to 4.25% for the coupon and 30% to 35% for the premium.

The deal included a $10 million greenshoe.

Joint bookrunners were Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Credit Suisse Securities (USA) LLC.

The notes are non-callable for life. There is takeover protection and dividend protection via a conversion rate adjustment.

A portion of the proceeds will be used to repurchase up to 1 million shares of common stock in privately negotiated transactions, with remaining proceeds for general corporate purposes, which may include capital expenditures, acquisitions, land purchases, working capital, repayment or refinancing of debt and repurchases of additional stock.

LGI Homes is a homebuilder based in the Woodlands, Texas.

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