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Virtus plans $100 million sale of mandatory convertible preferreds at 7%-7.5%, up 17.5%-22.5%
By Stephanie N. Rotondo
Seattle, Jan. 25 – Virtus Investment Partners Inc. is offering $100 million of series D mandatory convertible preferred stock, the company said in a prospectus filed with the Securities and Exchange Commission on Wednesday.
The dividend is talked at 7% to 7.5%, with an initial conversion premium of 17.5% to 22.5%, according to a market source.
Barclays, J.P. Morgan Securities LLC, BofA Merrill Lynch and Morgan Stanley & Co. LLC are the joint bookrunners.
There is a $15 million over-allotment option.
Dividends on the $100-par preferreds will be payable on the first day of February, May, August and November, beginning May 1. Dividends will be paid in cash, common stock or a combination.
Each convertible preferred will automatically convert on the third business day immediately following the settlement period. The settlement period will commence on the 22nd trading day immediately preceding Feb. 1, 2020.
Prior to Feb. 1, 2020, holders can convert the preferreds at the minimum conversion rate. Holders can also convert upon a fundamental change at the fundamental change rate.
Concurrently with the convertible preferred sale, Virtus is offering $100 million of common stock. Neither offering is contingent upon the other.
Proceeds will be used for the acquisition of RidgeWorth Investments.
To that end, the company can redeem the issue in whole on Sept. 30 if the acquisition is not completed, or prior to such a date that an acquisitions termination event occurs.
The new convertible preferreds will be listed on the Nasdaq Global Select Market under the symbol “VRTSP.”
Virtus is a Hartford, Conn.-based investment management company.
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