Oak Street Health talks $750 million five-year convertibles to yield 0%-0.5%, up 42.5%-47.5%

By Abigail W. Adams

Portland, Me., March 10 – Oak Street Health Inc. plans to price $750 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 0% to 0.5% and an initial conversion premium of 42.5% to 47.5%, according to a market source.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC and Goldman Sachs & Co. LLC are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $112.5 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

In connection with the offering, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread and for general corporate purposes, which may include potential acquisitions or strategic transactions.

Oak Street Health is a Chicago-based network of primary care centers for adults on Medicare.

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