By Rebecca Melvin
New York, March 18 - Vector Group Ltd. priced an upsized $225 million of 1.75% six-year variable interest rate convertible notes on Tuesday with an initial conversion premium of 25%, according to a term sheet.
In addition to the fixed coupon rate, holders will receive dividend pass-through payments for a total annual interest rate of at least 5.5%.
The registered deal was initially talked at $150 million in size, and pricing came at the midpoint of talk, which was for a 1.5% to 2% coupon and a 22.5% to 27.5% premium.
The overnight deal was sold by bookrunner Jefferies LLC.
There is a $33.75 over-allotment option, which was upsized from $22.5 million.
The convertibles will be non-callable and have takeover and dividend protection.
Proceeds will be used for general corporate purposes, including for its existing tobacco business and for investments in real estate through its subsidiary New Valley LLC. A portion of the proceeds may also be used for upcoming debt maturities.
Miami-based Vector is a tobacco holding company.
| Issuer: | Vector Group Ltd.
|
| Issue: | Convertible senior notes
|
| Amount: | $225 million, upsized from $150 million
|
| Greenshoe: | $33.75 million, upsized from $22.5 million
|
| Maturity: | April 15, 2020
|
| Bookrunner: | Jefferies LLC
|
| Coupon: | 1.75%
|
| Price: | Par
|
| Yield: | Variable interest rate
|
| Conversion premium: | 25%
|
| Conversion price: | $27.16
|
| Conversion ratio: | 36.8155
|
| Calls: | Non-callable
|
| Puts: | No calls
|
| Takeover protection: | Yes
|
| Settlement: | Shares and cash in lieu of fractional shares
|
| Price talk: | 1.5%-2%, up 22.5%-27.5%
|
| Pricing date: | March 18
|
| Settlement date: | March 24
|
| Distribution: | Registered
|
| Stock symbol: | NYSE: VGR
|
| Stock price: | $21.73 at close March 18
|
| Market capitalization: | $2.02 billion
|
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