By Stephanie N. Rotondo
Seattle, June 16 – Par Pacific Holdings Inc. sold $100 million of five-year convertible senior notes to yield 5% with a 15.16% initial conversion premium before the open on Thursday, the company said in a press release.
The deal came at the cheap end of talk for a yield of 4.5% to 5% and an initial conversion premium of 15% to 25%.
The Rule 144A deal has a $15 million greenshoe and was done via bookrunner BofA Merrill Lynch.
The initial conversion rate is 55.5556 common shares per each $1,000 of notes, equal to an initial conversion price of $18.00 per share.
The deal has a call provision if Par Pacific’s acquisition of Hermes Consolidated LLC is terminated. Par Pacific may redeem the notes for cash at 102% of par plus interest by delivering a notice of redemption before Aug. 9, 2016.
Otherwise, the notes are non-callable for three years until June 20, 2019, and then provisionally callable if the stock trades above 140% of the initial conversion premium.
The notes have takeover and dividend protection and are convertible into cash, shares of stock or a combination of cash and stock at the company’s election.
In connection with the purchase of the notes, each owner of the notes will agree in writing not to hedge their economic exposure to Par Pacific common stock in any subscription rights offering on or before Sept. 30, 2016.
Proceeds are earmarked to finance a portion of the purchase price of the previously announced Hermes Consolidated acquisition, to repay $5 million of the outstanding principal amount of the term loan under the company’s delayed draw term loan and bridge loan credit agreement and for general corporate purposes.
Houston-based Par Pacific manages and maintains interests in energy and infrastructure businesses.
| Issuer: | Par Pacific Holdings Inc.
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| Securities: | Convertible senior notes
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| Amount: | $100 million
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| Greenshoe: | $15 million
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| Maturity: | June 15, 2021
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| Coupon: | 5%
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| Price: | Par of $1,000
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| Yield: | 5%
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| Initial conversion premium: | 15.16%
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| Initial conversion price: | $18.00 per share
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| Initial conversion rate: | 55.5556
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| Call options: | Make-whole call starting June 20, 2019 subject to 140% hurdle; also at 102 on termination of acquisition of Hermes Consolidated LLC
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| Net share settlement: | At issuer’s option
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| Bookrunner: | BofA Merrill Lynch
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| Co-Managers: | Imperial Capital and Sterne Agee
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| Pricing date: | June 16, before open
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| Settlement date: | June 21
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| Distribution: | Rule 144A
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| Talk: | 4.5% to 5%, up 15% to 25%
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| Stock symbol: | NYSE MKT: PARR
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| Stock price: | $15.63 at close on June 15
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| Market capitalization: | $631 million
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