Assurant talks $250 million three-year convertible preferreds at 6.25%-6.75%, up 17.5%-22.5%

By Abigail W. Adams

Portland, Me., March 6 – Assurant Inc. plans to price $250 million, or 2.5 million shares, of three-year $100-par mandatory convertible preferred stock after the market close Wednesday.

Price talk is for a dividend of 6.25% to 6.75% and an initial conversion premium of 17.5% to 22.5%, according to a market source.

Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are the joint bookrunners for the registered deal, which carries a greenshoe of $37.5 million, or 375,000 shares.

Dividends are payable quarterly as declared by the board of directors. Dividends are payable in cash or shares of common stock at the company’s option, according the preliminary prospectus.

If dividends are paid in stock, the number of shares will be determined over a five-day averaging period ending on the trading day preceding the dividend date.

If the dividend payment exceeds the product of the number of shares delivered and 97% of the average price, the excess amount will be paid in cash.

The mandatory convertible preferreds mature on March 15, 2021. If prior to maturity, the company has not paid dividends, the conversion rate will be adjusted.

There is takeover protection. Holders who convert the preferred stock upon a fundamental change will be entitled to a fundamental change conversion rate based on the price paid for common stock and a fundamental change dividend make-whole amount.

Proceeds will be used to help fund the acquisition of TWG Holdings Ltd. and refinance its 2.5% senior notes due 2018.

The mandatory convertible preferreds are subject to redemption at the company’s option if the acquisition is not completed.

The preferreds will be listed for trade on the New York Stock Exchange under the ticker “AIZP.”

Assurant is a New York-based provider of risk management products and services.

© 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.