By Rebecca Melvin
New York, Feb. 8 - MF Global Holdings Ltd. priced $250 million of five-year convertible senior notes after the close of markets Monday at par to yield 1.875% with an initial conversion premium of 27.5%, according to a news release.
The registered, off-the-shelf deal priced toward the rich end of coupon talk, which was 1.75% to 2.25%, and at the midpoint of 25% to 30% premium talk.
Goldman Sachs & Co., Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. were the joint bookrunners of the registered offering, with Bank of America Merrill Lynch, J.P. Morgan Securities LLC, RBS Securities Inc. and Sandler O'Neill + Partners, LP acting as the co-managers.
There is a $37.5 million greenshoe.
Proceeds will be used to repay debt under MF's $1.2 billion revolving credit facility, for general corporate purposes and to fund the cost of convertible note hedge transactions, which the company is entering into aimed at covering the number of MF Global common shares that will initially underlie the notes.
The cost of the hedge transactions will be offset partially by a corresponding set of warrant transactions, which have a strike price of $14.2275. The transactions will raise the initial conversion premium from the issuer's perspective to 75%.
The notes are non-callable for life. They are convertible before Aug. 1, 2015 if the price of shares for 20 out of 30 trading days is 130% of the conversion price. After Aug. 1, 2015, the notes are convertible at any time. The notes can be settled for cash or a combination of cash and shares.
New York-based MF Global is a global broker-dealer of commodities and listed derivatives.
| Issuer: | MF Global Holdings Ltd.
|
| Issue: | Convertible senior notes
|
| Amount: | $250 million
|
| Greenshoe: | $37.5 million
|
| Maturity: | Feb. 1, 2016
|
| Bookrunners: | Goldman Sachs & Co., Citigroup Global Markets Inc., Deutsche Bank Securities Inc.
|
| Co-managers: | Bank of America Merrill Lynch, J.P. Morgan Securities LLC, RBS Securities Inc., Sandler O'Neill + Partners
|
| Coupon: | 1.875%
|
| Price: | Par
|
| Yield: | 1.875%
|
| Conversion premium: | 27.5%
|
| Conversion price: | $10.37
|
| Conversion ratio: | 96.4716 shares per bond
|
| Calls: | Non-callable for life
|
| Puts: | No puts
|
| Contingent conversion: | Yes, before Aug. 1, 2015 subject to 130% price hurdle
|
| Price talk: | 1.75%-2.25%, up 25%-30%
|
| Takeover protection: | Yes
|
| Pricing date: | Feb. 7
|
| Settlement date: | Feb. 11
|
| Distribution: | Registered, off the shelf
|
| Stock symbol: | NYSE: MF
|
| Stock reference price: | $8.13
|
| Market capitalization: | $1.32 billion
|
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