By Ronda Fears
Nashville, May 15 - Silicon Valley Bancshares sold $135 million of 20-year convertible subordinated notes in the overnight Rule 144A market at par to yield 0% with a 31% initial conversion premium.
Lead manager for the Rule 144A deal was Credit Suisse First Boston.
The deal, sold on a warrant spread, priced at the cheap end of premium guidance of 31% to 37%.
The company said the $24 million net cost of entering into convertible note hedge and warrant transactions would offset potential dilution from conversion of the notes with respect to its common stock, up to a market price of $51.34 per share.
The company also used about $33 million to purchase stock from convertible note buyers.
Remaining proceeds of roughly $78 million will be used for stock repurchases and other general corporate purposes, which may include investments in, or extensions of credit to, its subsidiaries.
Terms of the deal are:
Issuer: Silicon Valley Bancshares
| Issue: | Convertible subordinated notes
|
| Lead manager: | | Credit Suisse First Boston
|
| Amount | $135 million
|
| Greenshoe: | $15 million
|
| Maturity: | June 15, 2008
|
| Coupon: | 0%
|
| Price: | Par
|
| Yield: | 0%
|
| Conversion premium: | 31%
|
| Conversion price: | $33.6277
|
| Conversion ratio: | 29.7374
|
| Call: | Non-callable
|
| Contingent conversion: | 110%
|
| Expected ratings: | Moody's: Baa2
|
| S&P: BBB
|
| Settlement: | May 20
|
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