By Abigail W. Adams
Portland, Me., Sept. 8 – Advanced Energy Industries Inc. priced $500 million of five-year convertible notes after the market close on Thursday at par at the midpoint of talk with a coupon of 2.5% and an initial conversion premium of 30%, according to a market source and a company news release.
Price talk was for a coupon of 2.25% to 2.75% and an initial conversion premium of 27.5% to 32.5%.
Citigroup Global Markets Inc., BofA Securities Inc. and Wells Fargo Securities LLC were bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.
The notes are non-callable until Sept. 20, 2026 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
There is dividend protection above 10 cents a share.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company entered into convertible note hedge and warrant transactions with a warrant strike price of $179.76, which represents a premium of 70% over the last reported sales price of stock.
Net proceeds are expected to be $487.9 million or will be $561.2 million if the greenshoe is exercised in full.
Proceeds will be used to cover the cost of the hedge transactions, to repurchase 378,286 shares for $40 million in privately negotiated transactions, to opportunistically repay outstanding debt, to fund growth plans which may include acquisitions and for general corporate purposes.
Advanced Energy is a Denver-based manufacturer of precision power conversion, measurement and control solutions for mission-critical applications.
| Issuer: | Advanced Energy Industries Inc.
|
| Amount: | $500 million
|
| Greenshoe: | $75 million
|
| Issue: | Convertible senior notes
|
| Maturity: | Sept. 15, 2028
|
| Bookrunners: | Citigroup Global Markets Inc., BofA Securities Inc. and Wells Fargo Securities LLC
|
| Coupon: | 2.5%
|
| Price: | Par
|
| Yield: | 2.5%
|
| Conversion premium: | 30%
|
| Conversion price: | $137.46
|
| Conversion rate: | 7.2747
|
| Call options: | Non-callable until Sept. 20, 2026 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
|
| Pricing date: | Sept. 7
|
| Settlement date: | Sept. 12
|
| Distribution: | Rule 144A
|
| Talk: | Coupon of 2.25% to 2.75% and initial conversion premium of 27.5% to 32.5%
|
| Stock symbol: | Nasdaq: AEIS
|
| Stock price: | $105.74 at market close Sept. 8
|
| Market capitalization: | $3.98 billion
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
