By Rebecca Melvin
Princeton, N.J., June 28 - Vector Group Ltd. sold $85 million of 20-year variable interest senior convertible debentures at par to yield 3.875% for the coupon, plus a pass-through of the common dividend, raising minimum interest to 5.75%, according to a syndicate source.
The initial conversion premium was set at 32%.
The overnight deal priced toward the rich end of talk for the coupon and initial conversion premium, at 3.75% to 4.25%, up 29% to 33%, respectively. Final pricing on the minimum interest came at the midpoint of guidance of 5.5% to 6%.
The Rule 144A deal has a greenshoe of $25 million and was sold via bookrunner Jefferies & Co. Inc.
The debentures are non-callable for five years, at which time the company must redeem a minimum of 10% of the total principle amount outstanding. There are puts in years six, 10 and 15.
The coupon will carry an additional amount of interest based on the amount of cash dividends per share paid on the stock during the prior three-month period ending on the record date.
Vector plans to use proceeds to call its 6.25% convertible subordinated notes due July 15, 2008, of which there is $62.5 million principal outstanding, and for general corporate purposes.
Miami-based Vector (NYSE: VGR) is a tobacco holding company.
| Issuer: | Vector Group Ltd.
|
| Issue: | Variable interest senior convertible debentures
|
| Amount: | $85 million
|
| Greenshoe: | $25 million
|
| Bookrunner: | Jefferies & Co. Inc.
|
| Maturity: | June 15, 2026
|
| Coupon: | 3.875%, with additional pass-through
|
| Price: | Par
|
| Yield: | 5.75% minimum
|
| Conversion premium: | 32%
|
| Conversion price: | $21.50
|
| Call features: | Non-callable for five years, then must redeem minimum 10% of principal amount
|
| Put features: | In years six, 10 and 15
|
| Price talk: | 3.75%-4.25%, up 29%-33%, minimum yield 5.5%-6%
|
| Pricing date: | June 27, after the close
|
| Settlement date: | July 12
|
| Distribution: | Rule 144A
|
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