RARE greenshoe exercised in full, upping 2.5% convertibles offer to $125 million

By Jennifer Chiou

New York, Nov. 27 - RARE Hospitality International Inc. said its $15 million greenshoe was fully exercised, raising its issue of 2.5% convertible senior notes due Nov. 15, 2026 to $125 million.

After the close on Nov. 16, the company priced $110 million of the 20-year convertibles within talk and an initial conversion premium of 30%.

RARE added that net proceeds, with greenshoe, amount to $122.2 million.

As already reported, the convertibles were offered at par, and were talked at a coupon of 2.5% to 3% and an initial conversion premium of 30% to 32%.

Wachovia Securities was the bookrunner of the Rule 144A offering.

The notes are non-callable for the first seven years, and may be put in years seven, 10 and 15.

There is a contingent conversion hurdle at 125% of the conversion price.

There is dividend and takeover protection.

RARE, an Atlanta-based restaurant operator, said it will use the proceeds to concurrently buy back its common stock, of which $61 million will be repurchased concurrently.

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