Nashville, April 28 - Lithia Motors Inc. sold $85 million of 10-year convertible senior subordinated notes at par to yield 2.875% with a 37.5% initial conversion premium via sole bookrunner Morgan Stanley.
The Rule 144A deal sold at the tighter end of price talk for a 2.75% to 3.25% coupon and at the middle of premium guidance of 35% to 40%.
Holders will have dividend protection for quarterly cash dividends in excess of 8 cents per share.
Proceeds will be used to pay down lines of credit used to finance prior acquisitions and for vehicle inventories.
Terms of the deal are:
| Issuer: | Lithia Motors Inc.
|
| Issue: | Convertible senior subordinated notes
|
| Bookrunner: | Morgan Stanley
|
| Amount: | $85 million
|
| Greenshoe: | $15 million
|
| Maturity: | May 1, 2014
|
| Coupon: | 2.875%
|
| Price: | Par
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| Yield: | 2.875%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $37.69
|
| Conversion ratio: | 26.5331
|
| Contingent conversion: | 120%
|
| Contingent payment: | 120%
|
| Call: | Non-callable for 5 years
|
| Put: | In year 5
|
| Price talk: | 2.75-3.25%, up 35-40%
|
| Pricing date: | April 27, after the close
|
| Settlement date: | May 3
|
| Distribution: | Rule 144A
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