Aerojet pricing $200 million seven-year convertibles; price talk 1.875%-2.375%, up 27.5%-32.5%

By Stephanie N. Rotondo

Seattle, Dec. 7 – Aerojet Rocketdyne Holdings Inc. announced a $200 million offering of convertible senior notes due Dec. 15, 2023 in a press release on Wednesday.

Price talk is for a yield of 1.875% to 2.375% with an initial conversion premium of 27.5% to 32.5%.

BofA Merrill Lynch and Jefferies are the joint bookrunners.

The deal includes a $30 million over-allotment option.

Prior to Sept. 15, 2023, the notes are convertible at the holder’s option only in certain circumstances. After that date, the notes are convertible at any time.

There is a contingent conversion trigger if the stock hits 130% of the conversion price.

Conversions will be settled by cash, common stock or a combination thereof.

The notes become redeemable on or after Dec. 21, 2020 under certain circumstances – including a 150% price hurdle – at par plus accrued interest.

Proceeds will be used to repay a revolving credit facility, to redeem certain outstanding debt and for general corporate purposes.

Aerojet is an El Segundo, Calif.-based aerospace and defense company.

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