By Kenneth Lim
Boston, May 24 - Global Crossing Ltd. on Tuesday priced $125 million of five-year convertible senior notes at the cheap end of talk, with a coupon of 5% and an initial conversion premium of 20% over Tuesday's closing stock price.
The convertibles were offered at par, and price talk was for a coupon of 4% to 5% and an initial conversion premium of 20% to 25%.
The first three years of interest payments for the convertibles are collateralized by a portfolio of U.S. Treasury securities.
There is a greenshoe option for a further $18.75 million.
Goldman Sachs & Co. was the bookrunner of the off-the-shelf deal.
The convertible bonds were sold concurrently with an upsized $240 million offer of 12 million shares, which excludes an additional 1.8 million shares in an over-allotment option. The share offer was originally for 6.75 million shares, but that was raised to 9 million shares before a second increase to the final 12 million shares.
Global Crossing stock closed at $19.15 on Tuesday before the convertible deal was priced.
The convertibles are non-callable for the first three years. They may be put in the event of a takeover. There is dividend protection if the company starts paying a cash dividend.
STT Crossing Ltd., a wholly owned subsidiary of Global Crossing majority shareholder Singapore Technologies Telemedia Pte. Ltd., had given a non-binding indication that it wanted to buy up to $25 million of the convertibles offered. Global Crossing did not say if ST Telemedia bought any of the convertibles.
Global Crossing is a Bermuda-headquartered provider of internet-based telecommunications solutions. It will use the proceeds from the convertible and stock offerings to fund general corporate purposes, which may include buying assets and businesses. Part of the proceeds will also be used to buy the portfolio of U.S. Treasury securities to pay for the first three years' interest payments for the convertibles.
| Issuer: | Global Crossing Ltd.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | Goldman Sachs
|
| Amount: | $125 million
|
| Greenshoe: | $18.75 million
|
| Maturity: | May 15, 2011
|
| Coupon: | 5%
|
| Price: | Par
|
| Yield: | 5%
|
| Conversion premium: | 20%
|
| Conversion price: | $22.98
|
| Conversion ratio: | 43.5161
|
| Net-share settlement option: | Yes
|
| Dividend protection: | Conversion ratios will be adjusted for future cash dividends
|
| Takeover protection: | Change of control put
|
| Call protection: | Non-callable 3 years
|
| Price talk: | 4%-5%, 20%-25%
|
| Pricing date: | May 23
|
| Settlement date: | May 30
|
| Distribution: | Registered
|
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