By Rebecca Melvin
New York, May 4 - Owens-Brockway Glass Container Inc., a subsidiary of Owens-Illinois Inc., priced an upsized $600 million of five-year exchangeable senior notes after the close of markets on Monday to yield 3% with an initial conversion premium of 40%, according to a syndicate source.
The Rule 144A offering was originally talked to be $500 million in size, and it priced at the midpoint of talk for the coupon and at the rich end of talk for the initial conversion premium.
There is an over-allotment option for $90 million of notes, upsized from $75 million.
Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and Goldman Sachs & Co. were the joint bookrunners of the notes, which will be non-callable for life with no puts.
Upon exchange, the exchange obligation will be settled in a combination of cash to be paid by Owens-Brockway Glass Container Inc. and shares of Owens-Illinois.
Up to $55 million of the proceeds are expected to be used for the repurchase of Owens-Illinois shares concurrently with the closing of the notes, with remaining proceeds for general corporate purposes, including debt repayment and funding of strategic priorities.
There is dividend protection via an exchange rate adjustment and cash takeover protection via a make-whole table.
Perrysburg, Ohio-based Owens-Illinois is a glass container maker.
| Issuer: | Owens-Brockway Glass Container Inc.
|
| Exchangeable entity: | Owens-Illinois Inc.
|
| Issue: | Exchangeable senior notes
|
| Amount: | $600 million, upsized from $500 million
|
| Greenshoe: | $90 million, upsized from $75 million
|
| Maturity: | June 1, 2015
|
| Bookrunners: | Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and Goldman Sachs & Co.
|
| Coupon: | 3%
|
| Price: | Par, $1,000
|
| Yield: | 3%
|
| Conversion premium: | 40%
|
| Conversion price: | $47.47
|
| Conversion ratio: | 21.0642 shares
|
| Call protection: | Non-callable
|
| Puts: | No puts
|
| Price talk: | 2.75%-3.25%, up 35%-40%
|
| Pricing date: | May 3, after the close
|
| Settlement date: | May 7
|
| Distribution: | Rule 144A
|
| Stock listing: | NYSE: OI
|
| Stock reference price: | $33.91
|
| Market capitalization: | $5.7 billion
|
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