New Issue: Anthracite Capital prices downsized $60 million convertible senior notes at 11.75%, up 17.5%

By Evan Weinberger

New York, Aug. 24 - Anthracite Capital, Inc. priced $60 million in convertible senior notes due Sept. 1, 2027 with an 11.75% coupon and an initial conversion premium of 17.5% Friday before market open. The deal was downsized from an originally announced $100 million.

The convertibles came in at the cheap end of talk, which had been for a coupon of 10.75% to 11.75% and an initial conversion premium of 17.5% to 22.5%.

Banc of America Securities and Deutsche Bank Securities are joint bookrunners of the Rule 144A transaction.

There is a $20 million over-allotment option, downsized from an originally announced $25 million. The deal is expected to close on Aug. 29.

The convertibles have a conversion price of $10.79 per share and a conversion ratio of 92.7085. There is a contingent conversion subject to the stock trading at $14.02 per share for 20 days.

There are takeover and dividend protections built in.

The convertibles have call protection until Sept. 1, 2012 and they are puttable on Sept. 1 in each of 2012, 2017 and 2022.

Anthracite Capital is a New York-based real estate investment trust focused on investments in high yield commercial real estate loans and related securities. It is a subsidiary of New York-based BlackRock, Inc.

Anthracite plans to use $12 million of the proceeds to repurchase $20 million of its common stock and the rest of the proceeds to finance its commercial real estate strategies.

Issuer: Anthracite Capital, Inc.

Issue: Convertible senior notes

Amount: $60 million

Greenshoe: $20 million

Maturity: Sept. 1, 2027

Coupon: 11.75%

Yield: 11.75%

Conversion premium: 17.5%

Conversion price: $10.79

Conversion ratio: 92.7085

Call: Beginning Sept. 1, 2012

Put: Sept. 1 in each of 2012, 2017 and 2022

Contingent conversion: Subject to Anthracite stock trading at $14.02 (130%) for 20 days

Bookrunner: Banc of America Securities, Deutsche Bank

Distribution: Rule 144A

Pricing date: Aug. 23

Settlement date: Aug. 29

Talk: 10.75% to 11.75% coupon; 17.5% to 22.5% conversion premium; $100 million principal amount, $25 million greenshoe

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