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Greenbrier greenshoe ups 2.875% convertibles to $373.75 million
By Wendy Van Sickle
Columbus, Ohio, April 20 – Underwriters for Greenbrier Cos., Inc.’s 2.875% seven-year convertible notes fully exercised their $48.75 million greenshoe, lifting the total deal size to $373.75 million, according to a news release Tuesday.
The company priced an upsized $325 million of the convertibles after the market close on April 15 at par with an initial conversion premium of 30%.
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.
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.
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.
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