By Rebecca Melvin
New York, Aug. 13 - RadioShack Corp. priced an upsized $325 million of five-year convertible senior notes after the close Tuesday to yield 2.5% with a 32.5% initial conversion premium, according to a news release.
The deal was increased from the announced $300 million and came at the rich end of talk, which was for a yield of 2.5% to 3% and an initial conversion premium of 27.5% to 32.5%.
The Rule 144A deal was brought to market via joint bookrunners Citigroup and Banc of America Securities LLC and co-managers Merrill Lynch, Wachovia and Wells Fargo.
There is a $50 million over-allotment option.
Subject to a contingent conversion provision, the conversion ratio is 41.2414 and the conversion price $24.25.
Settlement is scheduled for Aug. 18.
The notes are non-callable for life with no puts.
Of the proceeds, $40.1 million will be used to pay for the net cost of the convertible note hedge and warrant transactions that will raise the effective conversion premium from the company's perspective to 100%.
RadioShack will also use $100 million of the proceeds to buy back stock. The remainder will be used for general corporate purposes, including as working capital to replace the company's $300 million revolving credit facility, which expires in June 2009.
Based in Forth Worth, Texas, RadioShack is a consumer electronics goods and services retailer.
| Issuer: | RadioShack Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $325 million, upsized from $300 million
|
| Greenshoe: | $50 million
|
| Maturity: | Aug. 1, 2013
|
| Bookrunners: | Citigroup and Banc of America Securities LLC
|
| Co-managers: | Merrill Lynch, Wachovia and Wells Fargo
|
| Coupon: | 2.5%
|
| Price: | Par
|
| Yield: | 2.5%
|
| Conversion premium: | 32.5%
|
| Conversion ratio: | 41.2414
|
| Conversion price: | $24.25
|
| Price talk: | 2.5%-3%, up 27.5%-32.5%
|
| Call: | Non-callable for life
|
| Puts: | None
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Contingent conversion: | Yes, at 130%
|
| Net share settlement: | Yes
|
| Pricing date: | Aug. 12
|
| Settlement date: | Aug. 18
|
| Distribution: | Rule 144A
|
| Stock symbol: | NYSE: RSH
|
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