Published on 9/5/2012 in the Prospect News Convertibles Daily.
New Issue: Toll Brothers prices $250 million 20-year exchangeable notes to yield 0.5%, up 50%
By Rebecca Melvin
New York, Sept. 5 - Toll Brothers Finance Corp., a wholly owned subsidiary of Toll Brothers Inc., priced $250 million of 20-year exchangeable notes at par after the market close Tuesday to yield 0.5% with an initial exchange premium of 50%, according to a syndicate source.
The Rule 144A deal priced at the midpoint of talk, which was for 0.25% to 0.75% yield and 47.5% to 52.5% premium. There is a $37.5 million over-allotment option.
Deutsche Bank Securities Inc., Citigroup Global Markets Inc. and RBS Securities Inc. were the joint bookrunners, with lead managers BMO Capital Markets Corp. and Goldman Sachs & Co.
The notes are non-callable for five years, and there are puts on Dec. 15, 2017, Sept. 15, 2022 and Sept. 15, 2027.
There is contingent interest of 0.5% at a bond price trigger of 120%, and there is takeover and dividend protection.
Horsham, Pa.-based Toll Brothers is a residential home builder, which will use proceeds for general corporate purposes.
| Issuer: | Toll Brothers Finance Corp.
|
| Guarantor: | Toll Brothers Inc. and certain subsidiaries
|
| Issue: | Exchangeable senior notes
|
| Amount: | $250 million
|
| Greenshoe: | $37.5 million
|
| Maturity: | Sept. 15, 2032
|
| Bookrunners: | Deutsche Bank Securities Inc., Citigroup Global Markets Inc., RBS Securities Inc.
|
| Lead managers: | BMO Capital Markets Corp., Goldman Sachs & Co.
|
| Coupon: | 0.5%
|
| Price: | Par
|
| Yield: | 0.5%
|
| Initial exchange premium: | 50%
|
| Exchange price: | $49.08
|
| Conversion ratio: | 20.3749
|
| Contingent interest: | 0.5% at a 120% price trigger
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes, via exchange rate adjustment ($0 quarterly threshold)
|
| Calls: | Non-callable until Sept. 15, 2017
|
| Puts: | At Dec. 15, 2017, Sept. 15, 2022 and Sept. 15, 2027
|
| Price talk: | 0.25%-0.75%, up 47.5%-52.5%
|
| Pricing date: | Sept. 4, after close
|
| Settlement date: | Sept. 11
|
| Distribution: | Rule 144A
|
| Stock symbol: | NYSE: TOL
|
| Stock price: | $32.72, at close on Sept. 4
|
| Market capitalization: | $5.5 billion
|
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