By Rebecca Melvin
New York, March 28 - PHH Corp. priced an upsized $220 million of four-year convertible senior notes after the markets closed Thursday at par with a coupon of 4% and an initial conversion premium of 20.59%, at the midpoint of price talk, according to a company release.
There is an over-allotment option to purchase up to an addition $30 million of notes.
The Rule 144A deal was initially talked to be $150 million, with a greenshoe of $22.5 million.
Price talk for the coupon was 3.75% to 4.25%, and for the initial conversion premium it was 17.5% to 22.5%.
J.P. Morgan Securities Inc., Citigroup and Wachovia were joint bookrunners.
The senior unsecured notes are non-callable for life. They will have contingent conversion subject to a 130% price trigger and 98% parity. They offer standard takeover and dividend protection but no contingent interest.
A portion of net proceeds will be used to pay the cost of convertible note hedge and warrant transactions intended to offset potential dilution of shares, with the balance used to repay debt under revolving credit borrowings. The hedging raises the effective conversion premium from the company's perspective to 60%.
PHH is a Mt. Laurel, N.J.-based mortgage-services company.
| Issuer: | PHH Corp.
|
| Issue: | Convertible senior unsecured notes
|
| Amount: | $220 million, up from $150 million
|
| Greenshoe: | $30 million, up from $22.5 million
|
| Maturity: | April 15, 2012
|
| Bookrunners: | J.P. Morgan Securities Inc., Citigroup, Wachovia
|
| Dividend: | 4%
|
| Price: | Par
|
| Yield: | 4%
|
| Conversion premium: | 20.59%
|
| Conversion price: | $20.50
|
| Conversion ratio: | 48.7805
|
| Calls: | Non-callable
|
| Contingent conversion: | 130% stock price trigger/98% parity trigger
|
| Contingent interest: | None
|
| Dividend protection: | Yes, standard
|
| Takeover protection: | Yes, standard
|
| Price talk: | 3.75%-4.25%, up 17.5%-22.5%
|
| Pricing date: | March 27 after the close
|
| Settlement date: | April 2
|
| Distribution: | Rule 144A
|
| Stock symbol: | NYSE: PHH
|
| Stock price: | $17.00 at close March 27
|
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