Albemarle greenshoe ups 7.25% mandatory convertibles to $2.3 billion

By William Gullotti

Buffalo, N.Y., March 8 – Underwriters for Albemarle Corp.’s recently priced 7.25% three-year convertibles exercised their $300 million over-allotment option in full, upping the total issue size to $2.3 billion, according to an 8-K filing with the Securities and Exchange Commission.

Albemarle priced an upsized $2 billion, or 40 million share, offering of three-year $50-par depositary shares representing a 1/20th interest in a share of $1,000-par series A mandatory convertible preferred stock after the market close on March 5 at par with a dividend of 7.25% and a threshold appreciation premium of 20%, as previously reported.

Pricing came at the midpoint of talk for a dividend of 7% to 7.5% and a threshold appreciation premium of 17.5% to 22.5%, according to a market source.

J.P. Morgan Securities LLC and BofA Securities Inc. were the active bookrunners for the SEC-registered offering, with HSBC Securities (USA) Inc., Mizuho Securities USA LLC, Santander US Capital Markets LLC, Jefferies LLC and Truist Securities, Inc. also acting as bookrunners.

As previously reported, the initial size of the offering was $1.75 billion, or 35 million shares, with a greenshoe of $262.5 million.

The depositary shares are non-callable, are putable upon a fundamental change, and will be listed on the New York Stock Exchange under the symbol “ALBPrA.”

There is dividend protection above 40 cents a quarter.

With the greenshoe fully exercised, the net proceeds of the issue will be approximately $2.24 billion.

Proceeds will be used for general corporate purposes, including the expansion of lithium operations in Australia and China and repayment of commercial paper.

Albemarle is a Charlotte, N.C.-based chemical manufacturing company.

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