MGP greenshoe fully exercised, lifts convertibles to $201.25 million

By Devika Patel

Knoxville, Tenn., Nov. 16 – Underwriters for MGP Ingredients Inc.’s 1.875% 20-year convertible notes exercised their over-allotment option in full for $26.25 million more of the convertibles, increasing the size of the issue to $201.25 million, the company said in an 8-K filed with the Securities and Exchange Commission.

As previously reported, the company sold the convertibles on Nov. 10 in a Rule 144A offering via bookrunner Wells Fargo Securities LLC.

The convertibles have an initial conversion premium of 37.5% and an initial conversion price of $96.24, which equals a conversion rate of 10.3911.

The notes are non-callable until Nov. 20, 2024. They are callable subject to a 130% hurdle from Nov. 20, 2024 to Nov. 20, 2026 and then become freely callable.

The notes are putable on Nov. 15, 2026, Nov. 15, 2031 and Nov. 15, 2036 or upon a change of control.

There is dividend protection of about 12 cents a quarter.

The notes will be settled in cash up to the principal amount with any remainder to be settled in cash, shares or a combination of both.

Proceeds will be used to reduce the balance of the company’s revolving credit facility.

MGP Ingredients is an Atchison, Kan.-based producer of distilled spirits, branded spirits and food ingredient solutions.

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