Dick's Sporting Goods prices upsized $155 million convertible to yield 2.375%, up 40%

New York, Feb. 11 - Dick's Sporting Goods, Inc. priced an upsized $155 million offering of convertible senior notes due 2024 after the close Wednesday to yield 2.375% with a 40% initial conversion premium.

The deal was increased from an original size of $125 million.

The convertibles came with a yield towards the low end of talk of 2.25% to 2.75% and a conversion premium in the middle of talk of 37.5% to 42.5%.

Merrill Lynch & Co. Inc. is sole bookrunner of the Rule 144A deal. Co-managers are UBS Investment Bank and Banc of America Securities.

The offering has a $17.5 million greenshoe.

The notes convert at price of $78.62 or a ratio of 8.6011.

The Pittsburgh sporting goods retailer will use part of the proceeds for a convertible bond hedge and a separate warrant transaction. The remainder will be used for general corporate purposes, which may include investing in new stores, accelerating store growth and acquisitions of complementary companies or businesses.

The company said the hedge increases the effective conversion premium to 100%.

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