By Angela McDaniels
Tacoma, Wash., July 6 - Sealy Corp. said that subscription rights were exercised for approximately $173.0 million principal amount of its 8% senior secured third-lien pay-in-kind convertible notes due July 15, 2016 during a rights offering that expired Thursday.
The total includes $89.7 million of convertibles subscribed for by majority shareholder Sealy Holding LLC, according to a company news release.
The company distributed rights to purchase $177.13 million principal amount of convertibles in the rights offering, which began May 28.
Sealy stockholders received one right per share. Every 13 rights allowed the holder to purchase one convertible at a subscription price of $25.
Stockholders had the right to oversubscribe in the offering, subject to pro ration provisions.
On Monday, the company said approximately $136.5 million of convertibles were requested through the exercise of rightsholders' oversubscription privilege, which includes about $89.7 million by Sealy Holding.
The roughly $4.1 million principal amount of convertibles available will be allocated among those who exercised their oversubscription privilege for a total issuance of $177.13 million principal amount of convertibles.
The convertibles are being co-issued by Sealy and Sealy Mattress Co. in $25 denominations and have a conversion price of $1 per share.
Beginning in 2012, Sealy will be able to terminate the convertibility of the notes upon the occurrence of specified conditions relating to the trading price of Sealy's common stock and its debt-to-EBITDA ratio.
Settlement is expected to occur Friday.
When the rights offering began, Sealy said it would apply to list the convertibles on the New York Stock Exchange.
The rights offering is one element of the company's refinancing plan announced May 13, which also includes a new $100 million asset-based revolving credit facility due 2013 and $350 million principal amount of senior secured notes due 2016.
The refinancing plan is designed to strengthen the company's capital structure by enhancing its liquidity position, adding cash to the balance sheet and extending nearer-term maturities through 2013 and beyond, according to a prior company news release.
Citigroup Global Markets Inc. was the dealer manager for the rights offering, and National City Bank (c/o Colbent Corp., 800 622-6757) was the information agent.
Sealy is a bedding manufacturer based in Trinity, N.C.
| Issuers: | Sealy Corp. and Sealy Mattress Co.
|
| Issue: | Senior secured third-lien pay-in-kind convertible notes
|
| Amount: | $173,132,000
|
| Manager: | Citigroup Global Markets Inc.
|
| Maturity: | July 15, 2016
|
| Coupon: | 8%
|
| Price: | Par of $25.00
|
| Yield: | 8%
|
| Conversion price: | $1.00
|
| Stock symbol: | NYSE: ZZ
|
| Stock price: | $1.80 at close July 2
|
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