Tower Group to sell $135 million four-year convertibles to yield 4.75%-5.25%, up 25%-30%

By Rebecca Melvin

New York, Sept. 14 - Tower Group Inc. planned to price $135 million of four-year convertible senior notes after the market close Tuesday that were talked to yield 4.75% to 5.25% with an initial conversion premium of 25% to 30%, according to a market source.

There is a $15 million greenshoe.

Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and FBR Capital Markets are the joint bookrunners for the Rule 144A offering. There are no co-managers.

The bonds are non-callable for life. There is takeover and dividend protection.

In connection with the offering, the company plans to enter into convertible note hedge and warrant transactions. The hedge transactions are aimed at reducing potential dilution of stock and offset potential cash payments in excess of the principal amount of converted notes.

Proceeds will be used to repurchase common stock concurrently with the offering, to purchase a call spread, to repay debt and for general corporate purposes.

New York-based Tower Group is a provider of commercial, personal, and specialty property and casualty insurance products and services.

© 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.