By Rebecca Melvin
New York, Feb. 9 - Annaly Capital Management Inc. priced $500 million of five-year convertibles before the market open Tuesday at 98 with a 4% coupon and an initial conversion premium of 20%, according to a syndicate source.
The registered offering came at the cheap end of talk, which was for a 3.5% to 4% coupon and a 20% to 25% premium.
There is a $75 million, or 15%, over-allotment option for the registered offering.
Credit Suisse Securities (USA) LLC was the bookrunner.
The unsecured senior notes will be provisionally callable with a forced conversion for the life of the bonds if the daily volume-weighted average price of the company's shares exceeds 130% of the conversion price for 10 of 15 consecutive trading days, subject to a full coupon make-whole.
There is dividend protection.
Proceeds are expected to be used to purchase mortgage-backed securities for the company's investment portfolio and for general corporate purposes.
Annaly Capital Management is a real estate investment trust based in New York that owns and manages a portfolio of mortgage-backed securities.
| Issuer: | Annaly Capital Management Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Maturity: | Feb. 15, 2015
|
| Bookrunner: | Credit Suisse Securities (USA) LLC
|
| Coupon: | 4%
|
| Price: | 98% of par, $1,000
|
| Conversion premium: | 20%
|
| Conversion price: | $21.456
|
| Conversion ratio: | 46.6070 shares
|
| Price talk: | 3.5%-4%, up 20%-25%
|
| Call: | Forced conversion at any time subject to 130% hurdle
|
| Pricing date: | Feb. 9
|
| Settlement date: | Feb. 12
|
| Distribution: | Registered
|
| Stock symbol: | NYSE: NLY
|
| Stock reference price: | $17.88
|
| Market capitalization: | $9.9 billion
|
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