Granite Construction talks $325 million five-year convertible notes to yield 3.75%, up 30%

By Abigail W. Adams

Portland, Me., May 8 – Granite Construction Inc. plans to price $325 million of five-year convertible notes after the market close on Monday with price talk for a fixed coupon of 3.75% and a fixed initial conversion premium of 30%, according to a market source.

BofA Securities Inc. is bookrunner for the Rule 144A offering, which carries a greenshoe of $48.75 million.

The notes will be settled in cash, shares or a combination of both at the company’s option.

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

The company will enter into privately negotiated transactions with holders of its 2.75% convertible notes due 2024 to exchange a portion of the notes for cash and shares.

Proceeds will be used to cover the cost of the call spread, to pay the cash portion of the exchange of its 2.75% notes due 2024 and for general corporate purposes.

Granite Construction is a Watsonville, Calif.-based construction company.

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