By Abigail W. Adams
Portland, Me., Jan. 23 – Spark Energy, Inc. priced a $50.5 million add-on to its $25-par perpetual 8.75% series A fixed-to-floating rate cumulative redeemable preferred stock at a public offering price of $25.25 after the market close Tuesday.
The offering is for 2 million shares.
B. Riley FBR, Janney Montgomery Scott, BB&T Capital Markets and Ladenburg Thalmann are joint bookrunners for the deal, which carries a greenshoe of 250,000 shares.
The preferred stock was initially priced in March 2017 with $35 million sold. Additional preferreds have been issued through an at-the-market program, raising the total to $42.6 million.
The preferreds will carry a dividend of 8.75% until April 15, 2022 and then switch to a dividend of Libor plus 657.8 basis points.
The preferreds are non-callable until April 15, 2022 unless there is a change of control event. The preferreds are freely callable thereafter at par.
Unless the company exercises its redemption option, holders of the series A preferreds will have conversion rights in a change of control event.
The preferreds are convertible into the lesser of the sum of the liquidation preference and accrued interest divided by the stock price, or the 0.917431 share cap.
Dividends are paid quarterly. If declared dividends are not paid on the series A preferred stock, no dividends will be paid to any parity or junior stock, according the preliminary prospectus.
Proceeds from the add-on are expected to be $48.7 million, or $54.8 million if the greenshoe is exercised.
Proceeds will be used for merger and acquisition opportunities, international expansion, to pay down debt under the company’s senior credit facility and for general corporate purposes.
The series A preferred stock is listed on Nasdaq under the symbol “SPKEP.” The closing price on Tuesday was $25.29.
Spark Energy is a Houston, Texas-based retail energy services company.
| Issuer: | Spark Energy Inc.
|
| Issue: | Series A fixed-to-floating rate cumulative redeemable preferred stock reopening
|
| Amount: | $50.5 million, or 2 million shares
|
| Greenshoe: | $6,312,500 million, or 250,000 shares
|
| Maturity: | Perpetual
|
| Bookrunners: | B. Riley FBR, Janney Montgomery Scott, BB&T Capital Markets and Ladenburg Thalmann
|
| Co-managers: | Boenning & Scattergood, Incapital, National Securities Corp. and U.S. Capital Advisors
|
| Dividend: | 8.75%, from April 15, 2022 switch to Libor plus 657.8 bps
|
| Issue price: | $25.25
|
| Liquidation preference | Par of $25
|
| Call options: | Beginning April, 15 2022 at par plus accrued dividends
|
| Pricing date: | Jan. 23
|
| Settlement date: | Jan. 26
|
| Listing: | Nasdaq: SPKEP
|
| Total outstanding: | $77.6 million after add on
|
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