By Kenneth Lim
Boston, March 15 - The Stanley Works priced $300 million of equity units that comprise 5.2-year convertible senior notes and 3.2-year mandatory purchase contracts at the rich end of talk on Wednesday after the market closed. The convertible priced at a coupon of three-month Libor minus 350 basis points and an initial conversion premium of 19%, while the purchase contracts bear a 5.125% coupon.
The convertible was offered at par. It was talked at a coupon of three-month Libor minus 350 bps to three-month Libor minus 300 bps and an initial conversion premium of 15% to 19%.
The purchase contract's adjustment coupon was the same as talk.
There is an over-allotment option for a further $30 million.
Citigroup, Morgan Stanley and Banc of America were the bookrunners of the registered offering. Citigroup and Morgan Stanley were the structuring agents.
There was a concurrent $200 million offering of three-year unsecured notes.
The purchase contract requires the holder to buy $1,000 of Stanley Works common stock on May 17, 2010. The number of shares received will not exceed 18.366, based on the reference stock price of $54.45.
The convertible notes will be remarketed in May 2010, and the coupon may be reset.
The convertibles have dividend and takeover protection.
Stanley Works, a New Britain, Conn.-based maker of tools and security products, plans to use the proceeds of the deal to repay its commercial debt, to repay a $130 million loan and to pay convertible note hedge and warrant transactions.
| Issuer: | The Stanley Works
|
| Issue: | Convertible senior notes with mandatory purchase contracts
|
| Bookrunners: | Citigroup, Morgan Stanley and Banc of America
|
| Amount: | $300 million
|
| Greenshoe: | $30 million
|
| Maturity: | May 17, 2012
|
| Coupon: | Three-month Libor minus 350 bps
|
| Price: | Par
|
| Yield: | Three-month Libor minus 350 bps
|
| Conversion premium: | 19%
|
| Conversion price: | $64.80
|
| Conversion ratio: | 15.4332
|
| Contingent conversion: | None
|
| Contingent payment: | None
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | Three-month Libor minus 350 bps to three-month Libor minus 300 bps, up 15%-19%
|
| Purchase contract settlement: | May 17, 2010
|
| Purchase contract adjustment: | 5.125%
|
| Purchase contract reference price: | $54.45
|
| Pricing date: | March 14, after the close
|
| Settlement date: | March 20
|
| Distribution: | Registered
|
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