By Abigail W. Adams
Portland, Me., Nov. 15 – Rambus Inc. priced $150 million in five-year convertible notes Tuesday night to yield 1.375% with an initial conversion premium of 30%.
The coupon came richer than price talk of 1.5% to 2% while the initial conversion premium came at the middle of talk of 27.5% to 32.5%, according to market sources.
Barclays, Credit Suisse and Deutsche Bank are bookrunners for the deal, which carries a greenshoe option of $22.5 million.
Proceeds from the Rule 144A offering will be used for the purchase of a call spread, the repurchase of up to $56.8 million of Rambus’ 1.125% convertible notes due 2018, and for general corporate purposes.
Prior to pricing, Rambus planned to repurchase $60 million of the outstanding $138 million of the 1.125% convertible notes.
Rambus may enter into additional hedge and warrant transactions if the greenshoe is exercised, according to a company release. The option counterparties Rambus plans to enter into hedge transactions with may modify their hedge positions by entering into or unwinding derivatives associated with company stock.
The hedge transactions raise the effective initial conversion premium from the issuer’s perspective to 60% and the price to $23.30.
There are no call or put options on the new notes, which will have dividend protection through a conversion rate adjustment, in addition to takeover protection.
There is a contingent conversion provision on the notes prior to Nov. 1, 2022.
Rambus is a Sunnyvale, Calif-based semiconductor and intellectual property products company.
| Issuer: | Rambus Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $150 million
|
| Greenshoe: | $22.5 million
|
| Maturity: | Feb. 1, 2023
|
| Bookrunners: | Barclays, Credit Suisse and Deutsche Bank
|
| Coupon: | 1.375%
|
| Price: | Par
|
| Yield: | 1.375%
|
| Conversion premium: | 40%
|
| Conversion price: | $18.93
|
| Conversion rate: | 52.8318
|
| Call options: | Non-callable
|
| Put options: | No puts
|
| Pricing date: | Nov. 14
|
| Settlement date: | Nov. 17
|
| Talk: | 1.5% to 2% yield, up 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: RMBS
|
| Stock price: | $14.56 as of Nov. 14 close
|
| Market capitalization: | $1.612 billion
|
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