Winnebago to price $270 million 5.4-year convertible notes to yield 1.5%-2%, up 27.5%-32.5%

By Rebecca Melvin

New York, Oct. 28 – Winnebago Industries Inc. plans to price $270 million of convertible senior notes due 2025 that were being talked to yield 1.5% to 2% with an initial conversion premium of 27.5% to 32.5%, according to market sources.

There is a $30 million greenshoe for the Rule 144A offering, which is being sold via joint bookrunners, Goldman Sachs & Co. LLC and BMO Capital Markets Corp.

The deal was expected to price after the market close on Tuesday with settlement to occur on Friday.

The notes have net share settlement and takeover protection.

In connection with the notes offering, the company expects to enter into privately negotiated convertible note hedge transactions with one or more initial purchasers of the notes. It will also enter into warrant transactions with option counterparties at a higher strike price relating to the same number of shares of the company’s common stock into which the bonds will be converted.

The proceeds will be used to fund the cost of entering into the convertible note hedge transactions and for the company’s previously announced acquisition of Newmar Corp. If the Newmar acquisition is not consummated, the proceeds will be used for fees related to cancelation and for general corporate purposes.

The Forest City, Iowa-based company makes recreational vehicles.

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