Penn National partial greenshoe ups convertibles to $330.5 million

By Wendy Van Sickle

Columbus, Ohio, May 19 – Underwriters for Penn National Gaming Inc.’s 2.75% six-year convertible notes exercised a $30,495,000 portion of their $45 million greenshoe, increasing the total deal size to $330,495,000, according to an 8-K filing with the Securities and Exchange Commission.

The company priced $300 million of the convertibles after the market close on May 11 at par with an initial conversion premium of 30%, as previously reported.

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.

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 carried a greenshoe of $37.5 million, or 2.5 million shares, which was fully exercised.

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.

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