By Stephanie N. Rotondo
Seattle, July 27 – Student Transportation Inc. is offering C$85 million of 5.25% convertible unsecured subordinated debentures due Sept. 30, 2021 on a bought-deal basis, the company said in a press release on Wednesday.
National Bank Financial Inc. is the deal’s underwriter.
The debentures are convertible, at the holder’s option, into common stock at a strike price of C$9.35 per share. That represents a 26.3% premium over Wednesday’s closing share price of C$6.89.
The notes become redeemable, at the company’s option, on or after Sept. 30, 2019. From that date to Sept. 30, 2020, the company can redeem the issue at par plus accrued interest, provided the volume weighted average trading price of the stock on the Toronto Stock Exchange is not less than 125% of the conversion price for the 20 days preceding the redemption notice. After Sept. 30, 2020, the company can redeem the notes without such a requirement.
Proceeds will be used to fund a redemption of the company’s 6.25% U.S. convertible unsecured subordinated debentures coming due June 30, 2018. Any remaining funds will be used for general corporate purposes.
Student Transportation is a Barrie, Ont.-based provider of school bus transportation solutions.
| Issuer: | Student Transportation Inc.
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| Securities: | Convertible unsecured subordinated debentures
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| Amount: | C$85 million
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| Maturity: | Sept. 30, 2021
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| Underwriter: | National Bank Financial Inc.
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| Coupon: | 5.25%
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| Conversion premium: | 26.3%
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| Conversion price: | C$9.35 per share
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| Call options: | From Sept. 30, 2019 to Sept. 30, 2020, the company can redeem the issue at par plus accrued interest, provided the volume weighted average trading price of the stock on the Toronto Stock Exchange is not less than 125% of the conversion price for the 20 days preceding the redemption notice. After Sept. 30, 2020, the company can redeem the notes without such a requirement
|
| Announcement date: | July 27
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| Stock symbol: | TSX: STB
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| Stock price: | C$6.89 as of Wednesday’s close
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