Nashville, Feb. 12 - Dick's Sporting Goods Inc. sold an upsized $155 million in proceeds of 20-year discount cash-to-zero convertible notes at 67.625 for a yield to maturity of 2.375% with a 40% initial conversion premium via bookrunner Merrill Lynch & Co.
The Rule 144A issue, upped from $125 million in proceeds, priced at the more aggressive end of yield talk for a cash coupon of 2.25% to 2.75% and at the middle of premium guidance of 37.5% to 42.5%.
The issue will pay a cash coupon for five years and then the bond will accrete at the cash coupon rate plus 25 basis points.
Holders will have full dividend protection.
The Pittsburgh-based sporting goods retailer said it plans to use proceeds for the net cost of a convertible bond hedge in connection with the notes and separate warrant transaction. Remaining proceeds will be used for general corporate purposes, such as investing in new stores, accelerating store growth and acquisitions.
Terms of the deal are:
| Issuer: | Dick's Sporting Goods Inc.
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| Issue: | Convertible senior unsecured notes
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| Bookrunners: | Merrill Lynch & Co.
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| Co-managers: | UBS Investment Bank and Banc of America Securities
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| Amount: | $155 million proceeds, upped from $125 million proceeds
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| Greenshoe: | $17.5 million proceeds, cut from $18.75 million proceeds
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| Maturity: | Feb. 15, 2024
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| Coupon: | 2.375% for 5 years, then 0% accreting plus 25 bps
|
| Price: | 67.625
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| Conversion premium: | 40%
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| Conversion price: | $78.62
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| Conversion ratio: | 8.6011
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| Contingent conversion: | 120%
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| Call: | Non-callable for 5 years
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| Put: | In years 5, 10 and 15
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| Price talk: | 2.25-2.75%, up 37.5-42.5%
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| Pricing date: | Feb. 11
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| Settlement date: | Feb. 18
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| Distribution: | Rule 144A
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