World Kinect greenshoe ups 3.25% five-year convertibles to $350 million

By Mary-Katherine Stinson

Lexington, Ky., June 27 – Underwriters for World Kinect Corp.’s offering of five-year convertible notes exercised in full their $50 million greenshoe on June 22, according to an 8-K filing with the Securities and Exchange Commission.

The greenshoe lifts the total issue size to $350 million.

The notes were issued June 26.

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.

The initial conversion rate of the notes is 35.171 shares of common stock per $1,000 principal amount of notes which is equivalent to an initial conversion price of approximately $28.43 per share.

In connection with the offering, as previously reported, 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. The hedge transactions cover, subject to anti-dilution adjustments, approximately 12.3 million shares of the company’s common stock, the same number of shares initially underlying the notes.

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.

Net proceeds, which were approximately $336.5 million, were used to pay the approximately $30.5 million cost of convertible note hedge transactions after the cost was partially offset by the sale of warrants and to repurchase approximately 2.24 million shares of common stock from one of the initial purchasers for approximately $50 million at $22.30 per share.

The company intends to use the remaining net proceeds primarily for general corporate purposes, including the repayment of a portion of the amounts outstanding under its revolving credit facility.

World Kinect is a Miami-based global energy management company.

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