Pebblebrook greenshoe lifts 1.75% convertibles to $500 million

By Taylor Fox

New York, Dec. 15 – Pebblebrook Hotel Trust said underwriters fully exercised the over-allotment option for another $50 million of its 1.75% convertible senior notes due 2026, bringing the total deal size to $500 million.

Pricing came at the rich end of talk for a coupon of 1.75% to 2.25% and at the midpoint of talk for an initial conversion premium of 32.5% to 37.5%, according to a market source.

BofA Securities Inc. and Raymond James & Associates Inc. were joint bookrunners for the registered offering.

The initial size of the offering was $350 million with a greenshoe of $52.5 million.

The convertible notes are contingently convertible until June 15, 2026.

They are non-callable until Dec. 20, 2023 and then subject to a 130% hurdle.

The notes are putable upon a fundamental change.

They will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company entered into capped call transactions with a cap price of $33.0225, which represents a premium of 75% above the last reported sales price of stock.

Net proceeds are expected to be $486.9 million with the greenshoe is exercised in full.

Approximately $34.5 million will be used to cover the cost of the call spread with the remaining amount to be used to pay down debt under its senior unsecured revolving credit facility and unsecured term loans.

Pebblebrook is a Bethesda, Md.-based real estate investment trust focusing on urban and resort lifestyle hotels.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.