Published on 7/23/2004 in the Prospect News Convertibles Daily.
New Issue: Ocwen Financial upsized $150 million convertible yields 3.25%, up 35%
Nashville, July 23 - Ocwen Financial Inc. sold an upsized $150 million of 20-year contingent convertible senior unsecured notes at par to yield 3.25% with a 35% initial conversion premium via sole bookrunner Jefferies & Co. It was sold on swap with up to 25% of proceeds used to concurrently buy back stock.
The Rule 144A deal, upped from $125 million, priced at the middle of yield talk for a 3.0% to 3.5% coupon and at the aggressive end of premium guidance of 30% to 35%.
There is a 125% contingent conversion trigger, but offering materials include language giving the company the option to waive the CoCo feature pending a final ruling by the Financial Accounting Standards Board on the treatment of potential dilution from CoCo converts in reporting earnings.
The West Palm Beach, Fla.-based savings and loan, which services non-conforming, sub-performing and non-performing mortgage loans, intends to use remaining proceeds - after the stock repurchases - to reduce debt, for working capital and for general corporate purposes.
Terms of the deal are:
| Issuer: | Ocwen Financial Inc.
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| Issue: | Convertible senior unsecured notes
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| Bookrunner: | Jefferies & Co.
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| Amount: | $150 million, up from $125 million
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| Greenshoe: | $25 million, up from $20 million
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| Maturity: | Aug. 1, 2024
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| Coupon: | 3.25%
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| Price: | Par
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| Yield: | 3.25%
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| Conversion premium: | 35%
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| Conversion price: | $12.17
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| Conversion ratio: | 82.1693
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| Contingent conversion: | 125%, subject to be waived on FASB ruling
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| Dividend protection: | Yes, conversion ratio adjustment
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| Takeover protection: | Yes, premium make-whole
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| Call: | Non-callable for 5 years
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| Put: | In years 5, 10 and 15
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| Price talk: | 3.0-3.5%, up 30-35%
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| Pricing date: | July 22, after the close
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| Settlement date: | July 28
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| Distribution: | Rule 144A
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