By Rebecca Melvin
Princeton, N.J., Nov. 17 - E*Trade Financial Corp. sold $450 million of common equity units in a mandatory convertibles deal at par to yield 6.125% with a 21.2% initial conversion premium, according to a syndicate source.
The three-year mandatories priced at the cheap end of talk on the coupon, which was 5.625% to 6.125%, and toward the cheap end of talk for the initial conversion premium, which was 20% to 25%.
The mandatories, which are being offered concurrently with common stock and senior note offerings, have dividend protection but not takeover protection, which is standard for mandatory securities, a syndicate source said.
Morgan Stanley & Co. and J.P. Morgan Securities are acting as joint bookrunners for the offerings, which were made under an existing shelf registration.
Proceeds of the offerings will be used to help finance E*Trade's previously announced $1.6 billion acquisition of BrownCo, the online brokerage service of JP Morgan.
New York-based E*Trade is an online investment brokerage.
| Issuer: | E*Trade Financial Corp.
|
| Issue: | Common equity units
|
| Bookrunners: | Morgan Stanley & Co. and J.P. Morgan Securities
|
| Amount: | $450 million
|
| Maturity: | Nov. 18, 2008
|
| Coupon: | 6.125%
|
| Price: | Par, $25
|
| Yield: | 6.125%
|
| Conversion premium: | 21.20%
|
| Conversion price: | $21.8160
|
| Conversion ratio: | Minimum, 1.1459 and maximum, 1.3889
|
| Dividend protection: | Yes
|
| Takeover protection: | No
|
| Pricing date: | Nov. 16
|
| Settlement date: | Nov. 22
|
| Distribution: | Registered
|
| Price talk: | 5.625%-6.125%, up 20%-25%
|
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