Entertainment Properties to price $75 million of convertible preferreds at 8.5%-9% dividend, up 15%-20%

By Rebecca Melvin

New York, March 26 - Entertainment Properties Trust plans to price $75 million of cumulative convertible preferred stock on Thursday after the markets close, according to a syndicate source.

The series E cumulative convertible preferred shares were talked with a dividend of 8.5% to 9% and an initial conversion premium of 15% to 20%.

The preferreds will be sold as 3 million shares with a $25 liquidation preference. There is an over-allotment option to purchase an additional $11.25 million of shares.

Concurrent with the convertible offering, Entertainment Properties, a real-estate investment trust, plans to price 1.5 million common shares, with an over-allotment option for an additional 225,000 common shares.

J.P. Morgan Securities Inc. and Morgan Stanley & Co. Inc. are joint bookrunners for the convertible preferred share offering, with RBC Capital Markets Corp. acting as co-manager.

Both offerings will be made under an automatic shelf registration. They are independent of each other, and neither will be conditioned on the successful completion of the other.

An application has been made to list the series E cumulative convertible preferred shares on the New York Stock Exchange.

Proceeds are expected to be used for general business purposes, which may include acquisitions, development or financing of properties or the repayment of debt.

The Kansas City, Mo.-based REIT also expects to use proceeds to reduce debt under its unsecured revolving credit facility and to invest in interest-bearing securities.

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