By Kenneth Lim
Boston, May 3 - Scotland's Subsea 7 Inc. on Wednesday priced an upsized $300 million of five-year convertible notes near the rich end of talk at a coupon of 2.8% and an initial conversion premium of 42%.
The convertibles were initially talked at a coupon of 2.75% to 3.25% and an initial conversion premium of 37.5% to 42.5%. The size of the deal was originally $200 million with a greenshoe of a further $30 million. There is no greenshoe in the revised deal.
Lehman Brothers International (Europe) is the bookrunner.
The notes are callable only after the first three years and two weeks and only if the price of Subsea 7's common stock exceeds 150% of the conversion price. The volume-weighted average price of the stock was NOK 114 on Wednesday.
Subsea 7 is an underwater engineering and construction contractor. It plans to use the offering's proceeds to build $360 million to $400 million worth of offshore installation and construction vessels that it has on order and to reduce bank debt. It may also use part of the proceeds to repurchase up to 5 million of its own shares from the open market.
| Issuer: | Subsea 7 Inc.
|
| Issue: | Convertible notes
|
| Bookrunner: | Lehman Brothers International (Europe)
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| Amount: | $300 million
|
| Maturity: | Five years
|
| Coupon: | 2.8%
|
| Price: | Par
|
| Yield: | 2.8%
|
| Conversion premium: | 42%
|
| Conversion price: | NOK 161.88
|
| Call protection: | Non-callable for 3 years and 2 weeks. Callable after that subject to 150% threshold
|
| Price talk: | Coupon: 2.75%-3.25%
|
| Initial conversion premium: 37.5%-42.5%
|
| Pricing date: | May 3
|
| Settlement date: | June 6
|
| Stock symbol: | Oslo: SUB
|
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