By Kenneth Lim
Boston, April 13 - RAIT Financial Trust priced an upsized $350 million of 20-year convertible senior notes near the midpoint of talk on Thursday to yield 6.875% with an initial conversion premium of 27.5%.
The convertibles were offered at par. They were talked at a coupon of 6.75% to 7.25% and an initial conversion premium of 25% to 30%.
The size of the deal was originally $275 million with an over-allotment option for a further $50 million. The greenshoe is now an additional $75 million.
Bear, Stearns & Co. was the bookrunner of the Rule 144A offering.
The convertibles are non-callable for the first five years and may be put in years five, 10 and 15.
There is a contingent conversion trigger at 120% of the conversion price.
The convertibles have dividend and takeover protection.
RAIT subsidiaries RAIT Partnership LP and RAIT Asset Holdings LLC will guarantee the notes.
RAIT, a Philadelphia-based real estate investment trust that provides debt financing options to the real estate industry, said it will use the proceeds of the deal to concurrently buy back up to $75 million of its common shares and to fund general purposes.
| Issuer: | RAIT Financial Trust
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Bear, Stearns & Co.
|
| Amount: | $350 million
|
| Greenshoe: | $75 million
|
| Maturity: | April 15, 2027
|
| Coupon: | 6.875%
|
| Price: | Par
|
| Yield: | 6.875%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $34.86
|
| Conversion ratio: | 28.6874
|
| Contingent conversion: | 120%
|
| Net-share settlement option: | Yes
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable before April 20, 2012
|
| Puts: | April 15, 2012; April 15, 2017; April 15, 2022
|
| Price talk: | 6.75%-7.25%, up 25%-30%
|
| Pricing date: | April 12, after the close
|
| Settlement date: | April 18
|
| Guarantees: | RAIT Partnership LP and RAIT Asset Holdings LLC
|
| Distribution: | Rule 144A
|
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