EZCorp greenshoe lifts 2.375% convertibles due 2025 to $172.5 million

By Marisa Wong

Morgantown, W.Va., May 15 – The initial purchaser of EZCorp Inc.’s seven-year convertible notes exercised the deal’s $22.5 million over-allotment option in full on May 10, according to an 8-K filing with the Securities and Exchange Commission.

EZCorp issued a total of $172.5 million of the convertible notes on Monday.

As previously reported, the company priced an upsized $150 million of seven-year convertible notes prior to the market open on May 10 with a coupon of 2.375% and an initial conversion premium of 20%.

The initial size of the deal had been $100 million with a greenshoe of $15 million.

Pricing came at the midpoint of talk for a coupon of 2% to 2.5% and at the cheap end of talk for an initial conversion premium of 20% to 25%, according to a market source.

Morgan Stanley & Co. Inc. was the sole bookrunner for the Rule 144A deal.

The notes are non-callable until May 1, 2022 and then may be redeemed subject to a 130% hurdle with a make-whole. There are no put options.

The notes are contingently convertible until Nov. 1, 2024, according to previous announcement.

Conversion will be settled in cash, shares or a combination of both at the company’s option.

Proceeds will be used for general corporate purposes including acquisitions.

EZCorp has entered into non-binding letters of intent to acquire pawnshops in Latin America.

EZCorp is an Austin, Texas-based provider of pawn loans and operator of pawn shops in the United States, Canada and Latin America.

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