Dick’s Sporting Goods talks $500 million five-year convertibles to yield 3.25%-3.75%, up 30%-35%

By Abigail W. Adams

Portland, Me., April 14 – Dick’s Sporting Goods, Inc. plans to price $500 million of five-year convertible notes after the market close on Tuesday with price talk for a coupon of 3.25% to 3.75% and an initial conversion premium of 30% to 35%, according to a market source.

BofA Securities Inc. is the bookrunner for the Rule 144A offering, which carries a greenshoe of $75 million.

The notes are non-callable until April 17, 2023 and then subject to a 130% hurdle of the conversion premium with a make-whole.

The notes will be settled in cash, stock or a combination of both at the company’s option.

In connection with the pricing of the notes, the company will enter into convertible note hedge and warrant transactions.

Proceeds will be used to cover the cost of the hedge transactions with the remaining amount to be used for general corporate purposes.

Dick’s Sporting Goods is a Pittsburgh-based sporting goods retailer.

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