Advanced Energy greenshoe ups five-year convertibles to $575 million

By Wendy Van Sickle

Columbus, Ohio, Sept. 12 – Underwriters for Advanced Energy Industries Inc.’s five-year convertible notes fully exercised their $75 million greenshoe, lifting the total size of the deal to $575 million, according to a news release Tuesday.

The company priced $500 million of the 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%, as previously reported.

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.

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 will be $561.2 million with the greenshoe.

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.

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