By Abigail W. Adams
Portland, Me., Nov. 30 – PG&E Corp. priced an upsized $1.9 billion of four-year secured convertible notes after the market close on Wednesday at par at the rich end of talk with a coupon of 4.25% and an initial conversion premium of 35%, according to a company news release and a market source.
Price talk was for a coupon of 4.25% to 4.75% and an initial conversion premium of 30% to 35%.
J.P. Morgan Securities LLC (lead left), Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC were bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $250 million.
The initial size of the issue was $1.5 billion with a greenshoe of $225 million.
The notes are non-callable.
They are putable upon a fundamental change.
The notes will be secured on a first-lien basis by PG&E’s 100% ownership interest of the common stock of subsidiary Pacific Gas and Electric Co.
The notes will rank junior to current and future secured obligations secured by assets and junior to secured obligations under its revolving credit facility.
They will be equal to other obligations secured by common stock and senior to the company’s unsecured obligations.
The notes will be settled in cash, shares or a combination of both at the company’s option with the intention to settle the notes in cash up to the principal amount.
Net proceeds are expected to be $1.876 billion or will be $2.123 billion if the greenshoe is exercised in full.
Proceeds will be used alongside cash on hand to prepay the company’s outstanding $2.66 billion secured term loan maturing on June 23, 2025, which carries a floating interest rate that is currently 8.44%.
PG&E is an Oakland, Calif.-based utility company.
| Issuer: | PG&E Corp.
|
| Amount: | $1.9 billion
|
| Greenshoe: | $250 million
|
| Issue: | Convertible senior secured notes
|
| Maturity: | Dec. 1, 2027
|
| Bookrunners: | J.P. Morgan Securities LLC (lead left), Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC
|
| Coupon: | 4.25%
|
| Price: | Par
|
| Yield: | 4.25%
|
| Conversion premium: | 35%
|
| Conversion price: | $23.18
|
| Conversion rate: | 43.1416
|
| Call options: | Non-callable
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Nov. 29
|
| Settlement date: | Dec. 4
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 4.25% to 4.75% and initial conversion premium of 30% to 35%
|
| Stock symbol: | NYSE: PCG
|
| Stock price: | $17.17 at market close Nov. 29
|
| Market capitalization: | $44.84 billion
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