Vector greenshoe lifts 1.75% six-year convertibles to $258.75 million

By Susanna Moon

Chicago, March 24 - Vector Group Ltd. underwriters fully exercised the $33.75 over-allotment option on its 1.75% six-year variable interest rate convertible notes, bringing the total deal size to $258.75 million.

Vector priced an upsized $225 million of the 1.75% convertibles on March 18 with an initial conversion premium of 25%. The greenshoe was upsized from $22.5 million.

As previously reported, 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 deal was sold by bookrunner Jefferies LLC.

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.

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