By Abigail W. Adams
Portland, Me., April 16 – Greenbrier Cos., Inc. priced an upsized $325 million of seven-year convertible notes after the market close on Thursday at par with a coupon of 2.875% and an initial conversion premium of 30%, according to a company news release.
Pricing came at the cheap end of talk for a coupon of 2.375% to 2.875% and an initial conversion premium of 30% to 35%, according to a market source.
BofA Securities Inc. and Goldman Sachs & Co. LLC were bookrunners for the Rule 144A offering, which carries an upsized greenshoe of $48.75 million.
The initial size of the offering was $275 million with a greenshoe of $41.25 million.
The notes are non-callable for four years and then subject to a 130% hurdle.
There is dividend and takeover protection.
The notes will be settled up to par in cash with any excess in cash, shares or a combination of both at the company’s option.
Concurrently, the company plans to repurchase $207.1 million of its 2.875% convertible notes due 2024 for $228.4 million in cash in privately negotiated transactions.
Approximately $228.4 million of net proceeds will be used to fund the repurchase of its 2.875% convertible notes due 2024, $20 million will be used to repurchase 468,823 shares of its common stock, and $55 million will be used to retire other debt.
Additionally, Greenbrier chairman and CEO William A. Furman plans to purchase $2.5 million in common stock in open market transactions, according to the news release.
Remaining proceeds will be used for general corporate purposes, which may include additional repurchases of debt or stock or acquisitions.
Greenbrier is a Lake Oswego, Ore.-based supplier of equipment and services to the global freight transportation markets.
| Issuer: | Greenbrier Cos., Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $325 million
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| Greenshoe: | $48.75 million
|
| Maturity: | April 15, 2028
|
| Bookrunners: | BofA Securities Inc. and Goldman Sachs & Co. LLC
|
| Coupon: | 2.875%
|
| Price: | Par
|
| Yield: | 2.875%
|
| Conversion premium: | 30%
|
| Conversion price: | $55.46
|
| Conversion rate: | 18.0317
|
| Call options: | Non-callable for four years and then subject to a 130% hurdle
|
| Put options: | Upon a fundamental change
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| Pricing date: | April 15
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| Settlement date: | April 20
|
| Distribution: | Rule 144A
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| Talk: | Coupon of 2.375% to 2.875% and initial conversion premium of 30% to 35%
|
| Stock symbol: | NYSE: GBX
|
| Stock price: | $42.66 at market close April 15
|
| Market capitalization: | $1.4 billion
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