William Lyon greenshoe lifts mandatory convertibles to $115 million

By Marisa Wong

Madison, Wis., Dec. 3 – William Lyon Homes sold an additional $15 million of 6.5% tangible equity units, or 150,000 units at $100.00 each, under the over-allotment option of its previously announced public offering of units, according to an 8-K filing with the Securities and Exchange Commission.

The fully exercised greenshoe brings the total deal size to $115 million.

The company priced $100 million of the tangible equity units at par with a distribution rate of 6.5% and an initial conversion premium of 17.5% on Nov. 17. The initial offering closed on Nov. 21, and the sale of the additional units closed on Dec. 3.

As previously reported, pricing of the registered, off-the-shelf deal came through the tight end of talk for the dividend of 7% to 7.5% and at the cheap end of 17.5% to 22.5% premium talk.

The mandatory deal was sold via joint bookrunning managers J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Credit Suisse Securities LLC.

The notes are non-callable until maturity after three years.

Proceeds will be used to pay down outstanding debt under the company’s $120 million unsecured loan facility, which was borrowed to pay a portion of the purchase price for the company’s acquisition of Polygon Northwest Homes.

William Lyon is a Newport Beach, Calif.-based homebuilder.

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