Published on 1/21/2005 in the Prospect News Convertibles Daily.
New Issue: Fortis sells $774 million mandatory exchangeable, convertible into Assurant, at 7.75%, up 22%
Nashville, Jan. 21 - Fortis NV sold $774 million of three-year mandatory exchangeable bonds, convertible into Assurant Inc. shares, at par of 33.66 to yield 7.75% with a 22% initial conversion premium via bookrunner Morgan Stanley & Co.
The Rule 144A deal priced at the aggressive end of price talk for a yield of 7.75% to 8.25% and initial conversion premium of 18% to 22%.
Fortis essentially disposed of its stake in New York City-based Assurant with the exchangeable bonds and a concurrent offering of its remaining 27.2 million shares of common stock. In February 2004, Fortis sold about half its stake in Assurant with an initial public offering that brought it $1.8 billion. At that time, the Belgian-Dutch financial services firm had said it planned to dispose of its remaining stake in Assurant over time.
Terms of the deal are:
Issuer: | Fortis NV
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Reference shares: | Assurant Inc.
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Issue: | Mandatory exchangeable bonds
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Bookrunner: | Morgan Stanley & Co.
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Amount: | $774 million
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Maturity: | Jan. 26, 2008
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Coupon: | 7.75%
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Price: | Par, $33.66
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Yield: | 7.75%
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Conversion premium: | 22%
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Conversion price: | $41.0652
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Conversion ratio: | 0.8197
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Contingent conversion: | No
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Contingent payment: | No
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Dividend protection: | Yes
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Takeover protection: | Yes
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Call: | Non-callable
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Put: | No
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Price talk: | 7.75-8.25%, up 18-22%
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Pricing date: | Jan. 20, after market close
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Settlement date: | Jan. 28
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Distribution: | Rule 144A
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