GNC greenshoe exercise increases 1.5% convertibles to $287.5 million

By Angela McDaniels

Tacoma, Wash., Aug. 10 – The underwriters of GNC Holdings, Inc.’s 1.5% five-year convertible senior notes exercised their $37.5 million greenshoe in full, increasing the size of the deal to $287.5 million from $250 million, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, the company priced the convertibles after the market close on Aug. 4 with a 30% initial conversion premium.

The deal priced at the rich end of coupon talk, which had been set at 1.5% to 2%, and the cheap end of premium talk, which was circulated at 30% to 35%.

J.P. Morgan Securities LLC was the bookrunner for the Rule 144A deal.

The notes are non-callable, have takeover protection and will be convertible into cash, shares or a combination of both.

About $100 million of the proceeds will be used to repurchase shares of common stock from purchasers of the notes. Remaining proceeds will be used to reduce borrowings under the company’s term loan facility.

Pittsburgh-based GNC is a specialty health and wellness retailer.

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