By Rebecca Melvin
New York, June 12 - Sotheby's priced an upsized $175 million of five-year convertible senior unsecured notes on Wednesday at par to yield 3.125% with an initial conversion premium of 32.5%, according to a news release.
Initially the deal was expected to be $150 million in size.
The notes priced toward the cheap end of talk for the coupon, which was 2.875% to 3.375%, and at the midpoint of talk for the premium.
Sotheby's also plans to price an offering of $150 million of seven-year senior unsecured notes late Thursday.
The Rule 144A convertibles offering, sold via bookrunners Banc of America Securities LLC and Goldman Sachs & Co., has a greenshoe of $25 million.
Proceeds are earmarked to finance the acquisition of its York Avenue property and to redeem $100 million of existing 6.875% notes due 2009.
Sotheby's also expects to use a portion of proceeds together with proceeds from warrant transactions to fund convertible note hedge transactions that will have an exercise price equal to the conversion price of the convertible notes. The warrants Sotheby's sold have an exercise price of $44.9050, which is about 75% above the closing price of Sotheby's common stock on June 11.
The warrants could have a dilutive effect on Sotheby's earnings per share to the extent that the price of Sotheby's common stock exceeds the exercise price of the warrants.
Any remaining proceeds from these transactions will be used for general corporate purposes.
New York-based Sotheby's is an art auction and art-related financing company.
| Issuer: | Sotheby's
|
| Issue: | Convertible senior notes
|
| Amount: | $175 million, upsized from $150 million
|
| Greenshoe: | $25 million
|
| Maturity: | June 15, 2013
|
| Bookrunners: | Banc of America Securities LLC and Goldman Sachs & Co.
|
| Coupon: | 3.125%
|
| Price: | Par
|
| Yield: | 3.125%
|
| Conversion premium: | 32.5%
|
| Conversion ratio: | 29.4122
|
| Conversion price: | $34
|
| Price talk: | 2.875%-3.375%, up 30%-35%
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Pricing date: | June 11
|
| Settlement date: | June 17
|
| Distribution: | Rule 144A
|
| Stock symbol: | NYSE: BID
|
| Stock price: | $25.66 at close June 11
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
