By Rebecca Melvin
New York, April 24 – Cinedigm Corp. priced $64 million of 20-year convertible senior notes after the market close on Thursday at par to yield 5.5% with an initial conversion premium of 25%, according to a pricing term sheet.
Pricing came beyond the cheap end of coupon talk of 4.5% to 5% and at the cheap end of 25% to 30% premium talk.
There is no greenshoe. Initially the Rule 144A deal was talked at a $60 million base deal and a $9 million greenshoe. Piper Jaffray & Co. was the bookrunner.
The notes are non-callable until April 20, 2018 and then are provisionally callable for two years if shares exceed 130% of the conversion price for 20 out of 30 consecutive trading days. There are puts in years five, 10 and 15.
There is dividend and takeover protection.
About $18.2 million of the proceeds will be used to repay borrowings under the company’s term loan, with remaining proceeds to repurchase common stock under a forward stock purchase agreement, and for working capital and general corporate purposes, including development of the company’s OTT channels and applications and possible acquisitions.
In connection with the offering, the company intends to enter into a privately negotiated forward stock purchase transaction with a financial institution, under which the company will purchase about 11.8 million shares of common stock at $0.97 each. The counterparty will deliver shares in settlement on or about the fifth anniversary of the issuance of the notes.
Concurrently with the notes offering, Cinedigm is entering into an amendment to its credit agreement with Societe Generale and other lenders, which will extend the term of the revolving loans to March 31, 2018. It will also provide for the release of the equity interests in the company’s subsidiaries and change the interest rate to a base rate plus 300 basis points or Libor plus 400 bps, at the company’s election.
New York-based Cinedigm manages distribution rights of independent movie and television content.
| Issuer: | Cinedigm Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $64 million
|
| Maturity: | April 15, 2035
|
| Placement agent: | Piper Jaffray & Co.
|
| Coupon: | 5.5%
|
| Price: | Par
|
| Yield: | 5.5%
|
| Conversion premium: | 25%
|
| Conversion price: | $1.21
|
| Initial conversion ratio: | 824.5723 shares
|
| Calls: | Non-callable until April 20, 2018, then provisionally callable at 130% price hurdle
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Pricing date: | April 23
|
| Settlement date: | April 29
|
| Distribution: | Rule 144A
|
| Price talk: | 4.5%-5%, up 25%-30%
|
| Stock symbol: | NYSE: CIDM
|
| Stock reference price: | $0.9702, as of close April 23
|
| Market capitalization: | $75 million
|
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