By Kenneth Lim
Boston, April 12 - Rentech Inc. priced its $50 million offering of seven-year convertible senior notes at the cheap end of talk late Tuesday with a coupon of 4% and an initial conversion premium of 18%.
The convertibles were offered at par, and there is a greenshoe option for a further $7.5 million, syndicate sources confirmed.
Credit Suisse ran the books for the off-the-shelf deal.
Rentech also offered 12.5 million shares of common stock with a greenshoe option of a further 1.875 million shares in a concurrent shelf issue at $3.40 per share.
Rentech may call the convertibles at any time with a premium make-whole in the first five years only if the 10-day volume weighted average price of the common stock exceeds 150% of the conversion price for at least five straight trading sessions. That soft call protection ends in 2011, after which the convertibles may be called at any time.
There is also a contingent conversion threshold at 120% of the conversion price.
The convertibles have full dividend protection and takeover protection is in the form of a change of control put and a premium make-whole feature.
Rentech, a Denver, Colo.-based developer of alternative fuel technology, said it will use the proceeds to pay for Rentech's pending purchase of Royster-Clark Nitrogen Inc., to fund working capital at Royster-Clark and for general corporate purposes. Royster-Clark owns and operates a natural gas-fed nitrogen fertilizer plant in East Dubuque, Ill.
| Issuer: | Rentech Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Credit Suisse Securities
|
| Amount: | $50 million
|
| Greenshoe: | $7.5 million
|
| Maturity: | April 15, 2013
|
| Coupon: | 4%
|
| Price: | Par
|
| Yield: | 4%
|
| Conversion premium: | 18%
|
| Conversion price: | $4.012
|
| Conversion ratio: | 249.25
|
| Contingent conversion: | 120%
|
| Dividend protection: | Yes
|
| Takeover protection: | Change of control put with premium make-whole
|
| Call protection: | Callable in first 5 years subject to 150% threshold, freely callable after that
|
| Price talk: | 3.5%-4%, up 18%-22%
|
| Pricing date: | April 11 after the close
|
| Settlement date: | April 18
|
| Distribution: | Off shelf
|
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