Colony greenshoe increases convertibles add-on to $172.5 million

By Angela McDaniels

Tacoma, Wash., June 17 – Colony Financial, Inc. said the underwriters of 3.875% convertible senior notes due 2021 exercised their $22.5 million over-allotment option in full, increasing the size of the reopening to $172.5 million principal amount from $150 million principal amount.

The greenshoe was exercised on Friday, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, the company priced the add-on at 101.25 on June 11.

The joint bookrunning managers are BofA Merrill Lynch, Barclays, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc.

The initial conversion rate is 40.2941 shares per bond, which is equivalent to $24.82 per share, an effective 12.9% premium to the closing share price of $22.26 on June 11 (based on the actual 101.25 re-offer price).

The bonds are non-callable until Jan. 22, 2019 and then are provisionally callable if the company’s shares trade above 130% of the conversion price. The bonds have takeover protection.

Like the initial issue in January, the proceeds of the registered add-on will be used to repay amounts outstanding under the company’s secured revolving credit facility. Any remaining proceeds will be used to acquire target assets and for working capital and general corporate purposes.

Colony Financial is a Los Angeles-based real estate investment and finance company that is focused on acquiring, originating and managing a portfolio of real estate-related debt and equity investments.

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