By Kenneth Lim
Boston, July 30 - PSS World Medical, Inc. priced $200 million of six-year convertible senior notes at the cheap end of talk after the market close on Tuesday to yield 3.125% with an initial conversion premium of 27.5%.
Price talk for the notes, which were offered at par, was for a coupon between 2.625% and 3.125% and an initial conversion premium of 27.5% to 32.5%.
There is an over-allotment option for an additional $30 million.
Goldman Sachs & Co. was the bookrunner for the Rule 144A offering.
The notes are non-callable and have no investor puts.
They have full dividend protection in the form of a conversion rate adjustment and protection for investors upon a fundamental change.
Proceeds are expected to be used to repurchase about $35 million of common stock and $150 million of the 2.25% convertible senior notes due March 15, 2024; to enter into call options overlay transactions; and for general corporate purposes.
In conjunction with this offering, PSS plans to enter into convertible note hedge transactions with the initial purchaser or its affiliates. And the company plans to enter into a separate transaction to sell warrants to purchase its common stock.
The hedging will raise the effective conversion premium from the company's perspective to 70%.
PSS is a Jacksonville, Fla.-based specialty marketer and distributor of medical products.
| Issuer: | PSS World Medical, Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Goldman Sachs & Co.
|
| Amount: | $200 million
|
| Greenshoe: | $30 million
|
| Maturity: | May 1, 2014
|
| Coupon: | 3.125%
|
| Price: | Par
|
| Yield: | 3.125%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $21.22
|
| Conversion ratio: | 47.1342
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | 2.625%-3.125%, up 27.5%-32.5%
|
| Pricing date: | July 29, after the close
|
| Settlement date: | Aug. 4
|
| Distribution: | Rule 144A
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
