By Ronda Fears
Nashville, Aug. 8 - Lockheed Martin Corp. sold $850 million of 30-year cash-to-zero convertible floating rate notes at par to yield three-month Libor minus 25 basis points with a 52.5% initial conversion premium.
The Rule 144A issue sold at the middle of revised yield talk, which was sweetened by 25 to 60 bps, and at the cheap end of premium guidance. The revised talk put the yield at Libor minus 20 to 30 bps with a 52.5% to 57.5% initial conversion premium versus the original yield talk of Libor minus 45 to 90 bps.
Joint bookrunners were Goldman Sachs & Co., Citigroup, and JP Morgan.
The senior unsecured notes will be non-callable for five years, with a put in year five. Also there is a contingent conversion trigger of 130% and contingent interest trigger of 120%.
Holders will have dividend protection in the form of a conversion ratio adjustment.
Lockheed plans to purchase for cash up to $1.15 billion of its outstanding 7.25% notes due 2006 and the 8.375% debentures due 2024 originally issued by Loral Corp.
Terms of the new deal are:
Issuer: Lockheed Martin Corp.
| Issue: | Convertible cash-to-zero senior unsecured floating rate notes
|
| Lead managers: | | Goldman Sachs, Citigroup, and JP Morgan
|
| Amount | $850 million
|
| Greenshoe: | $150 million
|
| Maturity: | Aug. 15, 2033
|
| Coupon: | 3-mo Libor minus 25 bps for 5 years, then 0%
|
| Price: | Par
|
| Yield to maturity: | 3-mo Libor minus 25 bps
|
| Conversion premium: | 52.5%
|
| Conversion price: | $75.79
|
| Conversion ratio: | 20.3732
|
| Call: | Non-callable for 5 years
|
| Put: | In years 5, 10, 15, 20 and 25
|
| Price talk: | Revised: 3-mo Libor minus 20-30 bps, up 52.5-57.5%
|
| Original: 3-mo Libor minus 45-90 bps, up 52.5-57.5%
|
| Contingent conversion: | 130%
|
| Contingent payment: | 120%
|
| Pricing date: | Aug. 7, after the close
|
| Settlement: | Aug. 13
|
| Distribution: | Rule 144A
|
|
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
