By Kenneth Lim
Boston, June 22 - Stewart Enterprises Inc. priced $250 million of convertible senior notes in two tranches within talk on Thursday after the market closed. The $125 million seven-year series yields 3.125% with an initial conversion premium of 32.5% while the equally sized nine-year tranche yields 3.375% with an initial conversion premium of 32.5%.
The seven-year notes were talked at a coupon of 2.875% to 3.375% and an initial conversion premium of 30% to 35% and the nine-years were talked at a coupon of 3.125% to 3.625% and an initial conversion premium of 30% to 35%.
The convertibles were offered at par.
There is no over-allotment option.
Banc of America and Merrill Lynch were the bookrunners of the Rule 144A offering.
The convertibles are non-callable and may not be put.
There is a contingent conversion trigger at 130% of the conversion price.
The convertibles have dividend and takeover protection.
There is a net-share settlement feature for both series.
Stewart, a Jefferson, La.-based provider of funeral and cemetery products, said it will use the proceeds to fund convertible note hedge and warrant transactions. It will use $165 million of the proceeds to prepay the remaining balance of a term loan and use $64.2 million to buy back its own stock.
| Issuer: | Stewart Enterprises Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunners: | Banc of America and Merrill Lynch
|
| Total amount: | $250 million
|
| Pricing date: | June 21, after the close
|
| Settlement date: | June 27
|
| Distribution: | Rule 144A
|
|
|
| Seven-year series
|
| Amount: | $125 million
|
| Greenshoe: | None
|
| Maturity: | June 15, 2014
|
| Coupon: | 3.125%
|
| Price: | Par
|
| Yield: | 3.125%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $11.05
|
| Conversion ratio: | 90.4936
|
| Warrant strike premium: | 55%
|
| Warrant strike price: | $12.93
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Contingent conversion: | 130%
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Talk: | 2.875%-3.375% coupon; 30%-35% premium
|
|
|
| Nine-year series
|
| Amount: | $125 million
|
| Greenshoe: | None
|
| Maturity: | June 15, 2016
|
| Coupon: | 3.375%
|
| Price: | Par
|
| Yield: | 3.375%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $11.05
|
| Conversion ratio: | 90.4936
|
| Warrant strike premium: | 65%
|
| Warrant strike price: | $13.76
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Contingent conversion: | 130%
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Talk: | 3.125%-3.625% coupon; 30%-35% premium
|
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