Published on 10/29/2003 in the Prospect News Convertibles Daily.
New Issue: PMI Group upsized $300 million convertible yields 5.875%, up 24%
By Ronda Fears
Nashville, Oct. 29 - PMI Group Inc. sold an upsized $300 million of three-year mandatory convertibles at par of 25 to yield 5.875% with a 24% initial conversion premium, via bookrunner Banc of America Securities.
The deal, boosted from $250 million, sold aggressively outside of yield talk for a 6.0% to 6.5% dividend, and at the rich end of premium guidance for 20% to 24% premium.
Concurrently, PMI sold an upsized stock offering. The company sold 5 million shares, up from a planned 4.2 million shares.
Walnut Creek, Calif.-based PMI plans to use proceeds to help finance its investment in the purchase of Financial Guaranty Insurance Co. from General Electric Co., which was announced Aug. 4. Any proceeds not applied to that purpose will be used for working capital and general corporate purposes.
Terms of the deal are:
| Issuer: | PMI Group Inc.
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| Issue: | Mandatory convertibles
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| Lead manager: | Banc of America Securities
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| Co-managers: | Citigroup, JPMorgan and Lehman Brothers
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| Amount: | $300 million, up from $250 million
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| Greenshoe: | $45 million, up from $37.5 million
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| Maturity: | Nov. 15, 2006
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| Dividend: | 5.875%
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| Price: | Par, $25
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| Yield: | 5.875%
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| Conversion premium: | 24%
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| Conversion price: | $47.492
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| Conversion ratio: | 0.5264
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| Call: | Non-callable for 3 years
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| Price talk: | 6.0-6.5%, up 20-24%
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| Pricing date: | Oct. 28, after the close
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| Settlement | Nov. 3
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| Distribution: | Registered
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