PHH greenshoe fully exercised, lifts 4% convertibles due 2012 to $250 million

By Devika Patel

Knoxville, Tenn., April 2 - Underwriters for PHH Corp.'s 4% convertible senior notes due 2012 exercised their over-allotment option in full for $30 million more of the notes, increasing the size of the issue to $250 million, the company said in a news release.

As previously reported, PHH sold the notes at par on March 27 after the close with an initial conversion premium of 20.59%. The notes have a conversion price of $20.50 per share and 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.

J.P. Morgan Securities Inc., Citigroup and Wachovia were joint bookrunners of the Rule 144A deal.

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.

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