LCI talks $400 million five-year convertible notes to yield 0.75%-1.25%, up 27.5%-32.5%

By Abigail W. Adams

Portland, Me., May 10 – LCI Industries plans to price $400 million of five-year convertible notes after the market close on Monday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Wells Fargo Securities LLC, BofA Securities Inc. and J.P. Morgan Securities LLC are underwriters for the Rule 144A offering, which carries a greenshoe of $60 million.

The notes are non-callable until May 20, 2024 and then subject to a 130% hurdle.

There is takeover and dividend protection.

The notes will be settled in cash up to the principal amount with the remaining to be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company will enter into convertible note hedge and warrant transactions.

Proceeds will be used to cover the cost of the hedge transactions and to repay the outstanding amount under the company’s revolving credit facility. Remaining proceeds will be used for general corporate purposes.

LCI Industries is an Elkhart, Ind.-based manufacturer and supplier of component pieces for original equipment manufacturers in the recreation and transportation markets.

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