Published on 2/19/2004 in the Prospect News Convertibles Daily.
New Issue: Sovereign Bancorp $700 million convertible preferred at 4.375%, up 35%
Nashville, Feb. 19 - Sovereign Bancorp Inc. sold $700 million of 30-year convertible preferreds at par of 50 to yield 4.375% with a 35% initial conversion premium via sole bookrunner Lehman Brothers.
The registered offering priced at the cheap end of price talk of 3.875% to 4.375%, up 35% to 40%.
Holders will have dividend protection in the way of a conversion ratio adjustment if the company initiates a common stock cash dividend.
Terms of the deal are:
| Issuer: | Sovereign Bancorp Inc.
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| Issue: | Convertible trust preferreds
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| Bookrunner: | Lehman Brothers
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| Joint lead manager: | Citigroup Global Markets Inc.
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| Co-managers: | Bear Stearns & Co., Keefe & Co., Sandler O'Neill, Friedman Billings Ramsey and JPMorgan Securities
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| Amount: | $700 million
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| Greenshoe: | $100 million
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| Maturity: | March 1, 2034
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| Dividend: | 4.375%
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| Price: | Par, $50
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| Yield: | 4.375%
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| Conversion premium: | 35%
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| Conversion price: | $30.67
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| Conversion ratio: | 1.6301
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| Call: | Non-callable for 3 years, then with 130% hurdle
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| Expected ratings | Moody's: Ba1
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| S&P: BB-
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| Price talk: | 3.875-4.375%, up 35-40%
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| Pricing date: | Feb. 19, before the open
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| Settlement date: | Feb. 26
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| Distribution: | Registered
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