By Rebecca Melvin
New York, Oct. 8 - Navistar International Corp. said it priced $200 million of five-year convertible bonds with a 4.5% coupon at the wide end of talk and a 60% initial conversion premium.
The bonds were talked at a 4% to 4.5% coupon and a 60% to 65% initial conversion premium, according to a syndicate source. They also priced at a discount to par at 99.5, as expected.
The Rule 144A senior notes have a $30 million greenshoe.
The securities were being offered by J.P. Morgan Securities LLC, BofA Merrill Lynch and Credit Suisse Securities (USA) LLC.
The notes will be convertible at an initial conversion rate of 17.1233 Navistar shares per $1,000 principal amount, which is equivalent to an initial conversion price of $58.40.
Proceeds will be used, together with $270 million of intercompany borrowings from its financing subsidiary, for general corporate purposes, including funding capital expenditures and repurchasing some of its outstanding 3% senior subordinated convertible notes due 2014 in open market and privately negotiated transactions.
The notes are non-callable for three years and then provisionally callable if shares exceed 130% of the conversion price. There is net share settlement. They also have takeover and dividend protection, the source stated.
Lisle, Ill.-based Navistar is a truck, bus, military vehicle and diesel engine maker.
| Issuer: | Navistar International Corp.
|
| Issue: | Convertible bonds
|
| Amount: | $200 million
|
| Greenshoe: | $30 million
|
| Maturity: | Oct. 15, 2018
|
| Bookrunners: | J.P. Morgan Securities LLC, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC
|
| Coupon: | 4.5%
|
| Price: | 99.5, discount to par
|
| Conversion premium: | 60%
|
| Conversion price: | $58.40
|
| Conversion ratio: | 17.1233 shares
|
| Calls: | Non-callable until 2016, then provisionally callable at 130% price hurdle
|
| Net share settlement: | Yes
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Price talk: | 4%-4.5%, up 60%-65%
|
| Distribution: | Rule 144A
|
| Pricing date: | Oct. 7
|
| Settlement date: | Oct. 11
|
| Stock symbol: | NYSE: NAV
|
| Stock reference price: | $36.50 at close Oct. 7
|
| Market capitalization: | $2.94 billion
|
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