By Rebecca Melvin
New York, Jan. 11 - PHH Corp. priced an upsized $220 million of 5.5-year convertible senior notes at par on Tuesday to yield a coupon of 6% with an initial conversion premium of 25%, according to a term sheet.
Initially the registered deal was going to be $150 million in size. It priced on the cheap end of talk, which was for a coupon of 5.5% to 6% and an initial conversion premium of 25% to 30%.
The over-allotment option was upsized to $30 million of additional notes from $22.5 million.
J.P. Morgan Securities LLC and Bank of America Merrill Lynch were the joint bookrunners of the registered offering.
Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBC Capital Markets, LLC and RBS Securities Inc. acted as co-managers.
The senior notes, which mature June 15, 2017, will be non-callable. They will have takeover protection.
Proceeds of the offering, along with cash on hand and proceeds from a recent reopening of its 9.25% senior notes, will be used to repay prior to or at maturity $250 million of the company's 4% convertibles due April 15, 2012.
Pending that use, proceeds may also be used to originate mortgage loans or to invest temporarily in short-term interest-bearing investment funds or similar assets.
Mt. Laurel, N.J.-based PHH is a business process management services company for the mortgage and fleet management industries.
| Issuer: | PHH Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $220 million, upsized from $150 million
|
| Greenshoe: | $30 million, upsized from $22.5 million
|
| Maturity: | June 15, 2017
|
| Bookrunners: | J.P. Morgan Securities LLC, Bank of America Merrill Lynch
|
| Co-managers: | Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBC Capital Markets LLC, RBS Securities Inc.
|
| Coupon: | 6%
|
| Price: | Par, $1,000
|
| Yield: | 6%
|
| Conversion premium: | 25%
|
| Conversion price: | $12.79
|
| Conversion ratio: | 78.2014
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | 5.5%-6%, up 25%-30%
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Pricing date: | Jan. 10
|
| Settlement date: | Jan. 17
|
| Distribution: | Registered
|
| Stock symbol: | NYSE: PHH
|
| Stock reference price: | $10.23
|
| Market capitalization: | $577.5 million
|
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