By Rebecca Melvin
New York, Sept. 13 – RH, formerly Restoration Hardware, priced $300 million five-year convertible notes with a coupon of 0% and an initial conversion premium of 25%, according to a market source and company news release.
BofA Securities Inc. was the bookrunner for the Rule 144A deal, which carries a $50 million greenshoe.
The notes are non-callable and have no puts. There is contingent conversion at a price trigger of 130% of the conversion price.
In connection with the notes offering, RH entered into convertible note hedge and warrant transactions on terms that have the effect of boosting the initial conversion premium to 100% from the issuer’s perspective, or to about $338.24.
Proceeds will be used to pay the net cost of the convertible note hedge and warrant transactions and to retire the company’s $200 million outstanding second-lien debt and reduce borrowings under its credit facility, as well as for general corporate purposes.
The notes would be convertible into cash, shares of common stock or a combination of the two.
Restoration Hardware is a Corte Madera, Calif.-based distributor of home furnishing products.
| Issuer: | RH
|
| Securities: | Convertible senior notes
|
| Amount: | $300 million
|
| Greenshoe: | $50 million
|
| Maturity: | Sept. 15, 2024
|
| Bookrunner: | BofA Securities Inc.
|
| Coupon: | 0%
|
| Conversion premium: | 25%
|
| Conversion price: | $211.40
|
| Conversion rate: | 4.7304
|
| Call options: | Non-callable
|
| Contingent conversion: | At 130% price trigger
|
| Put options: | None
|
| Hedge/warrant transactions: | Yes, at $338.24, boosting premium to 100% from issuer’s perspective
|
| Pricing date: | Sept. 12
|
| Settlement date: | Sept. 17
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 0% and an initial conversion premium of 25%-30%
|
| Stock symbol: | NYSE: RH
|
| Stock price: | $169.12 at market close Sept. 12
|
| Market capitalization: | $3.16 billion
|
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