By Abigail W. Adams
Portland, Me., May 5 – 2020 Mandatory Exchangeable Trust, a newly organized subsidiary of PetSmart Inc., priced $600 million par of $1,000 mandatory three-year exchangeable trust securities after the market close on Monday with a dividend of 6.5% and a threshold appreciation premium of 20%, according to a market source.
Pricing came at the midpoint of talk for a yield of 6.25% to 6.75% and a threshold appreciation premium of 17.5% to 22.5%.
The securities are exchangeable into Chewy Inc. common stock.
J.P. Morgan Securities LLC is active bookrunner for the Rule 144A offering, which carries a greenshoe of $90 million.
Morgan Stanley & Co. LLC, Barclays, BC Partners Securities LLC, BofA Securities Inc., Credit Suisse Securities (USA) LLC, Jefferies LLC, RBC Capital Markets LLC, UBS Securities LLC and Wells Fargo Securities LLC are passive bookrunners.
The securities will be settled in cash, shares or a combination of both at the company’s option.
PetSmart will receive the proceeds from the offering, which will be used to repay debt.
Chewy is a Dania Beach, Fla.-based online retailer of pet food and pet-related products.
PetSmart is a Phoenix-based specialty pet animal products retail chain.
| Issuer: | 2020 Mandatory Exchangeable Trust
|
| Securities: | Mandatory exchangeable trust securities
|
| Amount: | $600 million
|
| Greenshoe: | $90 million
|
| Maturity: | May 16, 2023
|
| Bookrunners: | J.P. Morgan Securities LLC (active), Morgan Stanley & Co. LLC, Barclays, BC Partners Securities LLC, BofA Securities Inc., Credit Suisse Securities (USA) LLC, Jefferies LLC, RBC Capital Markets LLC, UBS Securities LLC and Wells Fargo Securities LLC
|
| Dividend: | 6.5%
|
| Price: | Par
|
| Yield: | 6.5%
|
| Appreciation premium: | 20%
|
| Appreciation price: | $47.09
|
| Exchange rate: | Minimum 21.2368, maximum 25.4842
|
| Pricing date: | May 4
|
| Settlement date: | May 11
|
| Distribution: | Rule 144A
|
| Talk: | Yield of 6.25% to 6.75% and a threshold appreciation premium of 17.5% to 22.5%.
|
| Stock symbol: | NYSE: CHWY
|
| Stock price: | $39.24 at market close on May 4
|
| Market capitalization: | $15.75 billion
|
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