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Entertainment Properties prices upsized $135 million perpetual convertible preferreds at 5.75%, up 20%
By Kenneth Lim
Boston, Dec. 19 - Entertainment Properties Trust priced an upsized planned $135 million of perpetual convertible preferred stock with a 5.75% dividend and a 20% initial conversion premium after the close Tuesday.
The deal was increased from $125 million and came at the cheap end of talk, which was for a dividend of 5.5% to 5.75% and an initial conversion premium of 20% to 24%.
The conversion price is $71.34 and the conversion ratio 0.3504.
Earlier in the session, sources said call protection had been improved.
They also said the deal could be reoffered at 24.75. Entertainment Properties did not disclose in its announcement late Tuesday whether the deal was being reoffered.
Each preferred share will have par of $25.
There is an over-allotment option for a further $15 million, down from the planned $18.75 million.
Bear Stearns was the bookrunner of the registered off-the-shelf offering.
The company may convert the preferreds only after the first five years, subject to a hurdle at 135% of the conversion price. That hurdle was increased on Tuesday from the original 130%, according to filings by Entertainment Properties with the Securities and Exchange Commission.
The preferreds will have dividend protection for quarterly cash payouts above 68.75 cents per common share and takeover protection in the form of a make-whole premium.
Entertainment Properties, real estate investment trust that owns entertainment retail centers, cinemas and other entertainment-related properties, said it will use the proceeds of the deal to fund general corporate purposes, including acquisitions, and to reduce debt under a KeyBank facility.
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