By Rebecca Melvin
New York, Sept. 18 - Sonic Automotive Inc. priced an upsized $150 million of 20-year convertible senior notes at par to yield 5% with an initial conversion price of 32.5%, which was the rich end of revised talk, according to a syndicate source.
Revised talk for the deal that priced late Thursday was 5% to 5.5% for the coupon, with an initial conversion premium of 27.5% to 32.5%.
That was tightened from a 5.5% to 6% coupon, with a premium of 22.5% to 27.5%. Initially, deal size was talked at $125 million.
There is an over-allotment option for an additional $22.5 million of notes.
Sonic Automotive also priced 9 million shares of common stock at $10.10 per share, for a total capital raise of $240.9 million.
The registered offerings were sold via J.P. Morgan Securities Inc. and Bank of America Merrill Lynch, with Wells Fargo Securities, Moelis & Co. and Stephens Inc. acting as co-managers.
The bonds are non-callable for five years, with puts in years five, 10 and 15. There is contingent conversion at a price hurdle of 130%.
Proceeds will be used to repay all or some of Sonic's 4.25% convertible senior subordinated notes due 2015 of which there is about $160 million outstanding and which holders can put in November 2010, and its 6% convertible senior subordinated notes due 2012.
If there are proceeds remaining, Sonic will repay amounts outstanding under its credit facility.
Charlotte, N.C.-based Sonic is the third largest automotive retailer in the United States.
| Issuer: | Sonic Automotive Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunners: | J.P. Morgan Securities Inc. and Bank of America Merrill Lynch
|
| Amount: | $150 million, upsized from $125 million
|
| Greenshoe: | $22.5 million, upsized from $18.75 million
|
| Maturity: | Oct. 1, 2029
|
| Coupon: | 5%
|
| Price: | Par
|
| Yield: | 5%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $13.38
|
| Conversion ratio: | 74.7245
|
| Call protection: | Non-callable for five years
|
| Puts: | On Oct. 1, 2014, Oct. 1, 2019 and Oct. 1, 2024
|
| Price talk: | Revised to 5%-5.5%, up 27.5%-32.5%, from 5.5%-6%, up 22.5%-27.5%
|
| Takeover protection: | Yes
|
| Pricing date: | Sept. 17
|
| Settlement date: | Sept. 23
|
| Distribution: | Registered
|
| Stock symbol: | SAH
|
| Stock reference price: | $10.10
|
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