By Abigail W. Adams
Portland, Me., June 22 – World Kinect Corp. priced an upsized $300 million of five-year convertible notes after the market close on Wednesday at par at the midpoint of talk with a coupon of 3.25% and an initial conversion premium of 27.5%, according to a company news release and a market source.
Price talk was for a coupon of 3% to 3.5% and an initial conversion premium of 25% to 30%.
Morgan Stanley & Co. LLC (lead left), J.P. Morgan Securities LLC, BofA Securities Inc. and Raymond James & Associates were bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $50 million.
The initial size of the offering was $250 million with a greenshoe of $37.5 million.
The notes are non-callable until July 6, 2026 and then subject to a 130% hurdle.
They are putable upon a fundamental change.
The convertibles will be settled in cash up to the principal amount with remaining amounts to 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 $40.14, which represents a premium of 80% over the last reported sales price of stock.
Net proceeds are expected to be $291 million or will be $339.5 million if the greenshoe is exercised in full.
Approximately $26.2 million will be used to cover the cost of the hedge transactions and $50 million will be used to repurchase 2.24 million shares of common stock from the purchasers of the notes.
Remaining amounts will be used for the repayment of a portion of outstanding amounts under its revolving credit facility and for general corporate purposes.
World Kinect is a Miami-based global energy management company.
| Issuer: | World Kinect Corp.
|
| Amount: | $300 million
|
| Greenshoe: | $50 million
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| Issue: | Convertible senior notes
|
| Maturity: | July 1, 2028
|
| Bookrunners: | Morgan Stanley & Co. LLC (lead left), J.P. Morgan Securities LLC, BofA Securities Inc. and Raymond James & Associates
|
| Coupon: | 3.25%
|
| Price: | Par
|
| Yield: | 3.25%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $28.43
|
| Conversion rate: | 35.1710
|
| Call options: | Non-callable until July 6, 2026 and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
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| Pricing date: | June 21
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| Settlement date: | June 26
|
| Distribution: | Rule 144A
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| Talk: | Coupon of 3% to 3.5% and initial conversion premium of 25% to 30%
|
| Stock symbol: | NYSE: WKC
|
| Stock price: | $22.30 at market close June 21
|
| Market capitalization: | $1.46 billion
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