MGP Ingredients talks $175 million convertible notes due 2041 to yield 1.5%-2%, up 35%-40%

By Abigail W. Adams

Portland, Me., Nov. 9 – MGP Ingredients Inc. plans to price $175 million of convertible notes due 2041 after the market close on Wednesday with price talk for a coupon of 1.5% to 2% and an initial conversion premium of 35% to 40%, according to a market source.

Wells Fargo Securities LLC is the bookrunner for the Rule 144A offering, which carries a greenshoe of $26.25 million.

The notes are non-callable until Nov. 20, 2024. They are callable subject to a 130% hurdle from Nov. 20, 2024 to Nov. 20, 2026 and then become freely callable.

The notes are putable on Nov. 15, 2026, Nov. 15, 2031 and Nov. 15, 2036 or upon a change of control.

There is dividend protection of about 12 cents a quarter.

The notes will be settled in cash up to the principal amount with any remainder to be settled in cash, shares or a combination of both.

Proceeds will be used to reduce the balance of the company’s revolving credit facility.

MGP Ingredients is an Atchison, Kan.-based producer of distilled spirits, branded spirits and food ingredient solutions.

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