Virtus greenshoe lifts 7.25% convertible preferreds to $115 million

By Wendy Van Sickle

Columbus, Ohio, Feb. 2 – Underwriters for Virtus Investment Partners Inc.’s offering of 7.25% three-year series D mandatory convertible preferred stock fully exercised their over-allotment option, lifting the total deal size to $115 million, according to an 8-K filed with the Securities and Exchange Commission.

The company priced $100 million of the preferreds at par with an initial conversion premium of 20% on Jan. 27, as previously reported.

Barclays, J.P. Morgan Securities LLC, BofA Merrill Lynch and Morgan Stanley & Co. LLC acted as joint bookrunners.

The dividend came at the middle of the 7% to 7.5% yield talk and in the middle of talk for an initial conversion premium of 17.5% to 22.5%.

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 of 0.7576 shares. Holders can also convert upon a fundamental change at the fundamental change rate.

The maximum conversion rate is 0.9091 shares.

The initial reference price is $110, equal to $100 divided by the maximum conversion rate. The threshold appreciation price is $132, equal to $100 divided by the minimum conversion rate.

Concurrently with the convertible preferred sale, Virtus is offering $100.1 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 that date that an acquisition termination event occurs.

The new convertible preferreds will be listed on the Nasdaq Global Select Market under the sumbol VRTSP.

Virtus is a Hartford, Conn.-based investment management company.

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