By Abigail W. Adams
Portland, Me., May 12 – Penn National Gaming Inc. priced an upsized $300 million of six-year convertible notes after the market close on Monday at par with a coupon of 2.75% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the rich end of talk for a coupon of 2.75% to 3.25% and at the midpoint of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
Goldman Sachs & Co. LLC, BofA Securities Inc., J.P. Morgan Securities LLC, Fifth Third Securities Inc. and Wells Fargo Securities LLC were joint bookrunners for the registered offering, which carries an upsized greenshoe of $45 million.
The initial size of the offering was $250 million with a greenshoe of $37.5 million.
The notes are contingently convertible until Feb. 15, 2026. They are non-callable until Nov. 20, 2023 and then subject to a 130% hurdle above the conversion price.
They are putable upon a fundamental change.
Concurrently with the convertible notes, the company priced a secondary offering of $300 million, or 16,666,667 shares, at $18.00 a share.
The secondary offering carries a greenshoe of $37.5 million, or 2.5 million shares.
The secondary offering was upsized from $250 million.
Proceeds will be used for general corporate purposes.
Penn National Gaming is a Wyomissing, Pa.-based owner and operator of gaming and racing properties.
| Issuer: | Penn National Gaming Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $300 million
|
| Greenshoe: | $45 million
|
| Maturity: | May 15, 2026
|
| Bookrunners: | Goldman Sachs & Co. LLC, BofA Securities Inc., J.P. Morgan Securities LLC, Fifth Third Securities Inc. and Wells Fargo Securities LLC
|
| Co-managers: | Barclays, Citizens Capital Markets Inc., Macquarie Capital, Morgan Stanley & Co. LLC, Stifel Nicolaus & Co. Inc., SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC and U.S. Bancorp Investments Inc.
|
| Coupon: | 2.75%
|
| Price: | Par
|
| Yield: | 2.75%
|
| Conversion premium: | 30%
|
| Conversion price: | $23.40
|
| Conversion rate: | 42.7350
|
| Call options: | Non-callable until Nov. 20, 2023 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | May 11
|
| Settlement date: | May 14
|
| Distribution: | Registered
|
| Talk: | Coupon of 2.75% to 3.25% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: PENN
|
| Stock price: | $18.00 in concurrent offering
|
| Market capitalization: | $2.18 billion
|
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