New Issue: Avery Dennison prices $400 million HiMEDS with a 7.875% dividend, up 27%

By Evan Weinberger

New York, Nov. 15 - Avery Dennison Corp. priced $400 million in mandatory convertible equity units in the HiMEDS structure due Nov. 15, 2020 with a 7.875% dividend and a 27% initial conversion premium Wednesday after market close. The deal came in at the cheap end of talk, which had been for a 7.375% to 7.875% dividend and an initial conversion premium of 26% to 31%.

Citigroup and JPMorgan are bookrunners of the registered transaction, which was issued at par. The mandatories have a $40 million greenshoe and a settlement date of Nov. 20.

The mandatories have a threshold appreciation price of $65.09 and a minimum settlement ratio of 0.7682. There is a maximum settlement rate of 0.9756.

The mandatories are being issued at $50 per unit, and Avery Dennison will be issuing 8 million units.

The mandatories have call protection for life and no puts.

Avery Dennison is a Pasadena, Calif.-based label and office products producer. The company plans to use the proceeds to repay commercial paper obligations incurred in connection with its acquisition of Paxar Corp. in June.

Issuer: Avery Dennison Corp.

Issue: Mandatory convertible equity units in the HiMEDS structure

Amount: $400 million

Greenshoe: $40 million

Maturity: Nov. 15, 2020

Dividend: 7.875%

Price: Par

Yield: 7.875%

Conversion premium: 27%

Upper strike: $65.09

Minimum conversion ratio: 0.7682

Maximum conversion ratio: 0.9756

Bookrunner: Citigroup, JPMorgan

Distribution: SEC registered

Talk: 7.375%-7.875% dividend, 26%-31% conversion premium

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