By Stephanie N. Rotondo
Seattle, Feb. 22 – Parker Drilling Co. priced $50 million of 7.25% $100-par series A mandatory convertible preferred stock with an initial conversion premium of 15%, the company said in a press release on Wednesday.
The yield came at the cheap end of the 6.75% to 7.25% price talk, as well as the cheap end of the 15% to 20% premium talk.
Barclays is the bookrunner.
There is a $7.5 million over-allotment option.
The issue is mandatorily convertible into common shares on the third business day immediately following the last trading day of the final averaging period.
The mandatory conversion date is March 31, 2020.
Conversions will be done between a minimum of 41.4079 shares per each preferred and a maximum of 47.6190 shares. The initial reference price is $2.10, equal to 100 divided by the maximum conversion rate. The threshold appreciation price is $2.4150, equal to 100 divided by the minimum conversion rate.
Holders can convert the preferreds earlier than the mandatory conversion date at the minimum conversion rate. Early conversion can also occur upon a fundamental change at the fundamental change rate, plus a cash make-whole dividend.
Additionally, the company said it was publicly offering 12 million common shares at $2.10 per share, with an option to increase the deal by 1.8 million shares.
The new securities will be listed on the New York Stock Exchange under the ticker symbol “PKDP.”
Proceeds from both deals will be used for general corporate purposes, including working capital, capital expenditures, acquisitions or the repayment, redemption or refinancing of debt.
Parker Drilling is a Houston-based provider of drilling services and rental tools to the energy industry.
| Issuer: | Parker Drilling Co.
|
| Securities: | Series A mandatory convertible preferred stock
|
| Amount: | $50 million, or 500,000 shares
|
| Greenshoe: | $7.5 million, or 75,000 shares
|
| Maturity: | March 31, 2020
|
| Bookrunner: | Barclays
|
| Dividend: | 7.25%
|
| Price: | Par of $100
|
| Yield: | 7.25%
|
| Conversion premium: | 15%
|
| Threshold appreciation price: | $2.4150
|
| Initial price: | $2.10
|
| Conversion rate: | Min: 41.4079 shares
|
| Max: 47.6190 shares
|
| Pricing date: | Feb. 22
|
| Settlement date: | Feb. 27
|
| Talk: | 6.75% to 7.25% yield, with an initial conversion premium of 15% to 20%
|
| Cusip: | 701081309
|
| Expected listing: | NYSE: PXDP
|
| Stock symbol: | NYSE: PXD
|
| Stock price: | $2.35 as of Feb. 21 close
|
| Market capitalization: | $246.98 million
|
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