By Rebecca Melvin
New York, May 8 - SVG Capital plc priced £120 million of eight-year convertible bonds Thursday to yield 8.25% with an initial conversion premium of 2.6%, according to a company news release.
Concurrently with the offering, SVG is selling 6.9% of its portfolio assets. Together the actions are seen as part of an initiative to strengthen its balance sheet and liquidity position, the release said.
The senior subordinated notes will have a conversion price of 1,000p, which represents a premium to the net asset value of 974.3p as of Dec. 31, 2007.
JPMorgan Cazenove was the bookrunner for the notes, with Key Capital and the Royal Bank of Scotland acting as co-managers.
The portfolio of private equity fund interests comprises a range of interests that includes mature and noncore assets. The agreed purchase price for the portfolio is £102.4 million, which compares to a Dec. 31, 2007 net asset value of the fund interests of £100.3 million.
Following the sale of these fund interests, SVG Capital's core investments and commitments will remain focused on Permira funds, which continue to represent 89% of SVG Capital's private equity portfolio.
Completion of these transactions is conditional upon certain consents being obtained from the general partners of the funds in question and is expected to occur in the fourth quarter.
Proceeds of the asset sale and bond offering will strengthen SVG's balance sheet and liquidity position and give the company greater flexibility to take advantage of opportunities arising from the launch of new private equity funds, including investment vehicles launched by SVG, the release stated.
U.K.-based SVG invests in a portfolio of private equity funds, the majority of which are advised by Permira.
| Issuer: | SVG Capital plc
|
| Issue: | Convertible senior notes
|
| Amount: | £120 million
|
| Maturity: | 2016
|
| Bookrunner: | JPMorgan Cazenove
|
| Co-manager: | Key Capital and Royal Bank of Scotland
|
| Coupon: | 8.25%
|
| Price: | Par
|
| Yield: | 8.25%
|
| Conversion premium: | 2.6%
|
| Conversion price: | 1,000p
|
| Pricing date: | May 8
|
| Distribution: | Regulation S
|
| Price talk: | 4.5% to 5%, up 25% to 30%
|
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