By Abigail W. Adams
Portland, Me., May 9 – Granite Construction Inc. priced $325 million of five-year convertible notes after the market close on Monday at par with a coupon of 3.75% and an initial conversion premium of 30%, according to a company news release.
Pricing was in line with talk for a fixed coupon of 3.75% and a fixed initial conversion premium of 30%, according to a market source.
BofA Securities Inc. was bookrunner for the Rule 144A offering, which carries a greenshoe of $48.75 million.
HudsonWest LLC acted as financial adviser to the company.
The notes are non-callable until May 20, 2026 and then subject to a 130% hurdle.
They are putable upon certain corporate transactions.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company entered into capped call transactions with a strike price of $79.83, which represents a premium of 125% over the last reported sales price of stock.
The company also entered into privately negotiated transactions with certain holders of its 2.75% convertible notes due 2024 to exchange $198.7 million in principal of the 2.75% notes for $198.8 million in cash and 1.39 million shares.
The company entered into unwind agreements regarding the hedge and warrant transactions tied to the 2024 notes with the company to receive 1.39 million in common stock and pay $13.2 million in cash to terminate the transaction.
Net proceeds are expected to be $316 million or will be $363.6 million if the greenshoe is exercised in full.
Approximately $46.1 million of net proceeds will be used to cover the cost of the call spread, $198.8 million will be used to pay for the exchange of the 2024 notes, and $13.2 million will be used to unwind the warrant transactions tied to the 2024 notes.
Remaining proceeds will be used to repay outstanding amounts under its revolving credit facility and for general corporate purposes.
Granite Construction is a Watsonville, Calif.-based construction company.
| Issuer: | Granite Construction Inc.
|
| Amount: | $325 million
|
| Greenshoe: | $48.75 million
|
| Issue: | Convertible senior notes
|
| Maturity: | May 15, 2028
|
| Bookrunner: | BofA Securities Inc.
|
| Financial adviser: | HudsonWest LLC
|
| Coupon: | 3.75%
|
| Price: | Par
|
| Yield: | 3.75%
|
| Conversion premium: | 30%
|
| Conversion price: | $46.12
|
| Conversion rate: | 21.6807
|
| Call options: | Non-callable until May 20, 2026 and then subject to a 130% hurdle
|
| Put options: | Upon certain corporate transactions
|
| Pricing date: | May 9
|
| Settlement date: | May 11
|
| Distribution: | Rule 144A
|
| Talk: | Fixed coupon of 3.75% and fixed initial conversion premium of 30%
|
| Stock symbol: | NYSE: GVA
|
| Stock price: | $35.48 at market close May 8
|
| Market capitalization: | $1.56 billion
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
