Group 1 Automotive launches $100 million 10-year convertibles to yield 2.5%-3%, up 22.5%-27.5%

By Rebecca Melvin

New York, March 15 - Group 1 Automotive Inc. planned to price a $100 million offering of 10-year convertible notes after the close of markets on Tuesday that were talked to yield 2.5% to 3% with an initial conversion premium of 22.5% to 27.5%, according to a market source.

The Rule 144A offering has a greenshoe of $15 million and was being sold via joint bookrunners J.P. Morgan Securities Inc. and Bank of America Merrill Lynch.

The senior unsecured notes will be non-callable for life with no puts. There is a contingent conversion trigger at 130% and net share settlement for cash up to the principal amount and the remainder in shares.

Concurrently with the offering, Group 1 will enter into convertible note hedge and warrant transactions.

Proceeds will be used to redeem Group 1's existing $74.6 million balance of 8.25% senior notes and to pay the cost of the convertible hedge and warrant transactions.

Houston-based Group 1 is an automotive products and services retailer.

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