By Kenneth Lim
Boston, June 13 - Trex Co. Inc. priced $85 million of five-year convertible senior subordinated notes cheaper than talk on Tuesday to yield 6% with an initial conversion premium of 15%.
The convertibles were offered at par and priced after the market closed. The deal was talked at a coupon of 4.5% to 5.5% and an initial conversion premium of 20% to 25%.
The over-allotment option was upsized to an additional $12.5 million from the original option for a further $10 million.
JPMorgan was the bookrunner of the registered offering.
The convertibles are non-callable and may not be put.
There is a contingent conversion trigger at 130% of the conversion price.
The convertibles have dividend and takeover protection.
There is a net-share settlement feature.
Trex, a Winchester, Va.-based maker of wood-alternative decking, railing and fencing products, said it will use $25.7 million of the proceeds to repay its outstanding $24 million of 8.32% senior secured notes due 2009. It will also use the proceeds to repay an existing $45.8 million senior secured revolving loan and to fund general purposes.
| Issuer: | Trex Co. Inc.
|
| Issue: | Convertible senior subordinated notes
|
| Bookrunner: | JP Morgan
|
| Amount: | $85 million
|
| Greenshoe: | $12.5 million
|
| Maturity: | July 1, 2012
|
| Coupon: | 6%
|
| Price: | Par
|
| Yield: | 6%
|
| Conversion premium: | 15%
|
| Conversion price: | $21.78
|
| Conversion ratio: | 45.9116
|
| Contingent conversion: | 130%
|
| Net-share settlement option: | Yes
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | 4.5%-5.5%, up 20%-25%
|
| Pricing date: | June 12, after the close
|
| Settlement date: | June 18
|
| Distribution: | Registered
|
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