Callaway Golf tightens talk on $200 million six-year convertibles to coupon of 2.75%-3%, up 30%

By Abigail W. Adams

Portland, Me., April 29 – Callaway Golf Co. plans to price $200 million of six-year convertible notes after the market close on Wednesday with price talk tightening to a coupon of 2.75% to 3% and an initial conversion premium of 30%, according to a market source.

Initial price talk was for a coupon of 3% to 3.5% and an initial conversion premium of 25% to 30%, according to a market source.

Goldman Sachs & Co. LLC and BofA Securities LLC are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $30 million.

The notes are non-callable until May 6, 2023 and then subject to a 130% hurdle.

There is dividend and takeover protection.

In connection with the pricing of the notes, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, for working capital and for general corporate purposes.

Callaway Golf is a Carlsbad, Calif.-based golf equipment and active lifestyle company.

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