By Abigail W. Adams
Portland, Me., Jan. 8 – Summit Hotel Properties Inc. priced an upsized $250 million of five-year convertible notes after the market close on Thursday at par at the rich end of talk with a coupon of 1.5% and an initial conversion premium of 37.5%, according to an FWP filing with the Securities and Exchange Commission.
Price talk was for a coupon of 1.5% to 2% and an initial conversion premium of 32.5% to 37.5%, according to a market source.
BofA Securities Inc. and Deutsche Bank Securities Inc. are joint bookrunners for the registered offering, which carries an upsized greenshoe of $37.5 million.
The initial size of the offering was $200 million with a greenshoe of $30 million.
The notes are non-callable until Feb. 20, 2024 and then subject to a 130% hurdle.
They are putable upon a fundamental change. There is dividend protection.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing of the notes, the company entered into capped call transactions with a cap price of $15.26, which represents a premium of 75% over the last reported sales price of stock.
Net proceeds are expected to be $243.25 million or $279,812,500 if the greenshoe is exercised in full.
Approximately $18.4 million of the net proceeds will be used to cover the cost of the call spread.
Remaining proceeds will be used to repay debt under the company’s senior unsecured revolving credit facility and term loans and for general corporate purposes.
Summit Hotel Properties is an Austin, Tex.-based real estate investment trust focused on hotels for middle and upscale markets.
| Issuer: | Summit Hotel Properties Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $250 million
|
| Greenshoe: | $37.5 million
|
| Maturity: | Feb. 15, 2026
|
| Bookrunners: | BofA Securities Inc. and Deutsche Bank Securities Inc.
|
| Senior co-managers: | KeyBanc Capital Markets Inc., Regions Securities LLC and U.S. Bancorp Investments, Inc.
|
| Co-managers: | Capital One Securities, Inc., PNC Capital Markets LLC, Raymond James & Associates, Inc., BMO Capital Markets Corp., RBC Capital Markets, LLC, Robert W. Baird & Co. Inc. and Bancroft Capital, LLC
|
| Coupon: | 1.5%
|
| Price: | Par
|
| Yield: | 1.5%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $11.99
|
| Conversion rate: | 83.4028
|
| Call options: | Non-callable until Feb. 20, 2024 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Jan. 7
|
| Settlement date: | Jan. 12
|
| Distribution: | Registered
|
| Talk: | Coupon of 1.5% to 2% and initial conversion premium of 32.5% to 37.5%
|
| Stock symbol: | NYSE: INN
|
| Stock price: | $8.72 at market close Jan. 7
|
| Market capitalization: | $921.78 million
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
