By Abigail W. Adams
Portland, Me., Aug. 18 – Parsons Corp. priced an upsized $350 million of five-year convertible notes after the market close on Monday at par with a coupon of 0.25% and an initial conversion premium of 35%, according to a company news release.
Pricing came at the midpoint of talk for a coupon of 0% to 0.5% and at the rich end of talk for an initial conversion premium of 30% to 35%, according to a market source.
BofA Securities Inc. and Morgan Stanley & Co. LLC were joint bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $50 million.
The initial size of the offering was $300 million with a greenshoe of $45 million.
The notes are contingently convertible until March 15, 2025.
They are non-callable until Aug. 21, 2023 and then subject to a 130% hurdle.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the pricing of the notes, the company entered into convertible note hedge and warrant transactions.
The warrant transactions carry a strike price of $66.46.
Net proceeds are expected to be $341 million, assuming the greenshoe is not exercised.
Approximately $36 million of the proceeds will be used to cover the cost of the hedge transactions with the remaining amount to be used for general corporate purposes, which may include potential acquisitions.
Parsons is a Centreville, Va.-based technology company serving the defense, intelligence and critical infrastructure markets.
| Issuer: | Parsons Corp.
|
| Securities: | Convertible senior notes
|
| Amount: | $350 million
|
| Greenshoe: | $50 million
|
| Maturity: | Aug. 15, 2025
|
| Bookrunners: | BofA Securities Inc. and Morgan Stanley & Co. LLC
|
| Coupon: | 0.25%
|
| Price: | Par
|
| Yield: | 0.25%
|
| Conversion premium: | 35%
|
| Conversion price: | $44.86
|
| Conversion rate: | 22.2913
|
| Call options: | Non-callable until Aug. 21, 2023 and then subject to a 130% hurdle
|
| Put options: | None
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| Pricing date: | Aug. 17
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| Settlement date: | Aug. 20
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| Distribution: | Rule 144A
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| Talk: | Coupon of 0% to 0.5% and initial conversion premium of 30% to 35%
|
| Stock symbol: | NYSE: PSN
|
| Stock price: | $33.28 at market close Aug. 17
|
| Market capitalization: | $3.32 billion
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