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Lincare to offer $500 million convertibles in two tranches; both talked at 2.75%-3.25% coupon, up 50%-55%
By Evan Weinberger
New York, Oct. 24 - Lincare Holdings Inc. launched $500 million in convertible senior debentures due 2037 to be issued in two tranches Wednesday after market close.
The first tranche of $250 million in series A convertible senior debentures due Nov. 1, 2037 is talked at a coupon of 2.75% to 3.25% with an initial conversion premium of 50% to 55%.
The second tranche of $250 million in series B convertible senior debentures due Nov. 1, 2037 is talked at a coupon of 2.75% to 3.25% with an initial conversion premium of 50% to 55%.
Deutsche Bank and Merrill Lynch are joint bookrunners of the Rule 144A transaction. Each tranche has a $25 million over-allotment option. The debentures are set to price Thursday after market close.
The series A debentures have hard call protection for the first five years and puts in years five, 10, 15, 20 and 25.
The series B debentures have hard call protection for the first seven years and puts in years seven, 10, 15, 20 and 25.
Both tranches have contingent conversion subject to a 130% hurdle until Oct. 1, 2037 and a contingent payment trigger of 120%. Both tranches have net share settlement agreements and dividend and change of control protections.
Lincare provides oxygen and other respiratory therapy services to the home healthcare market. Lincare is based in Clearwater, Fla. The company plans to use $150 million to repurchase shares of its common stock. An undisclosed further amount may be used for further stock buybacks. The balance will be used to fund some acquisitions and for general corporate purposes.
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