Sotheby's greenshoe fully exercised, lifts 3.125% five-year convertibles to $200 million

By Devika Patel

Knoxville, Tenn., June 17 - Underwriters for Sotheby's 3.125% five-year convertible senior unsecured, notes exercised their over-allotment option in full for $25 million more of the notes, increasing the size of the issue to $200 million, the company said in an 8-K filed Tuesday with the Securities and Exchange Commission.

As previously reported, Sotheby's sold the convertibles at par in a Rule 144A deal on June 11 via joint bookrunners Banc of America Securities LLC and Goldman Sachs & Co.

The notes had an initial conversion premium of 32.5% and a conversion price of $34.00, which equals a conversion ratio of 29.4122.

The notes are non-callable, and there are no puts.

Proceeds are earmarked to finance the acquisition of Sotheby's 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 to fund convertible note hedge transactions that will have an exercise price equal to the conversion price of the convertible notes.

Any remaining proceeds will be used for general corporate purposes.

New York-based Sotheby's is an art auction and art-related financing company.

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