By Kenneth Lim
Boston, Nov. 14 - Earthlink Inc. on Monday priced $225 million of 20-year convertible senior notes within talk, at a coupon of 3.25% and an initial conversion premium of 42.5%.
The notes were offered at par and talked at a coupon of 3% to 3.5% and an initial conversion premium of 37.5% to 42.5%.
There is an over-allotment option for a further $33.75 million.
UBS Investment Bank and Banc of America Securities LLC were the bookrunners of the registered off-the-shelf offering.
The convertibles are non-callable for the first five years and may be put in years five, 10 and 15.
There is a contingent conversion hurdle at 130% of the conversion price.
There is dividend and takeover protection.
Earthlink, an Atlanta-based internet service provider, said the proceeds of the deal will be used for convertible note hedge and warrant transactions and for general purposes.
| Issuer: | Earthlink Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunners: | UBS Investment Bank and Banc of America Securities LLC
|
| Amount: | $225 million
|
| Greenshoe: | $33.75 million
|
| Maturity: | Nov. 15, 2026
|
| Coupon: | 3.25%
|
| Price: | Par
|
| Yield: | 3.25%
|
| Conversion premium: | 42.5%
|
| Conversion price: | $9.12
|
| Conversion ratio: | 109.6491
|
| Contingent conversion: | 130%
|
| Net-share settlement option: | Yes
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable before Nov. 15, 2011
|
| Puts: | Nov. 15, 2011; Nov. 15, 2016; Nov. 15, 2021
|
| Price talk: | 3%-3.5%, up 37.5%-42.5%
|
| Pricing date: | Nov. 13, after the close
|
| Settlement date: | Nov. 17
|
| Distribution: | Registered
|
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