By Kenneth Lim
Boston, Dec. 15 - PNC Financial Services Group Inc. on Thursday priced $1 billion of 30-year exchangeable senior notes at a coupon of three-month Libor minus 40 basis points and an initial exchange premium of 75%, and reoffered between 99.625 and 99.75.
The notes were offered at par during price talk and talked at the same coupon and exchange premium, but were eventually reoffered at variable prices. The notes were issued by PNC Funding Corp. but are guaranteed by and exchangeable into common stock of PNC Financial.
There is an over-allotment option for a further $150 million.
Morgan Stanley was the bookrunner of the Rule 144A offering.
The notes are non-callable for the first year and may be put in years one, two, five, 10, 15, 20 and 25.
The notes have dividend and takeover protection.
There is a net-share settlement feature.
PNC, a Pittsburgh-based financial services company, said it will use the proceeds of the deal for general purposes and to finance the acquisition and integration of Mercentile Bankshares Corp. PNC expects to issue $2 billion of debt securities and hybrid capital instruments to fund that acquisition.
| Issuer: | PNC Funding Corp.
|
| Issue: | Exchangeable senior notes
|
| Exchange property: | PNC Financial Services Group Inc. common stock
|
| Bookrunner: | Morgan Stanley
|
| Amount: | $1 billion
|
| Greenshoe: | $150 million
|
| Maturity: | Dec. 20, 2036
|
| Coupon: | Three-month Libor minus 40 bps
|
| Price: | Par, reoffered between 99.625 and 99.75
|
| Yield: | Three-month Libor minus 40 bps
|
| Conversion premium: | 75%
|
| Conversion price: | $128.55
|
| Conversion ratio: | 7.7788
|
| Net-share settlement option: | Yes
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable before Dec. 26, 2007
|
| Puts: | Dec. 20, 2007; Dec. 20, 2008; Dec. 20, 2011; Dec. 20, 2016; Dec. 20, 2021; Dec. 20, 2026; Dec. 20, 2031
|
| Price talk: | Three-month Libor minus 40 bps, up 75%
|
| Pricing date: | Dec. 14, after the close
|
| Settlement date: | Dec. 20
|
| Guarantees: | PNC Financial Services Group Inc.
|
| Distribution: | Rule 144A
|
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