By Rebecca Melvin
New York, Feb. 12 - Imperial Holdings Inc. priced $70 million of five-year convertible senior notes after the market close on Wednesday to yield 8.5% with an initial conversion premium of 25%, according to a syndicate source.
Pricing came at the rich end of talk, which was for an 8.5% to 9% coupon and a 20% to 25% initial conversion premium.
FBR Capital Markets & Co. was sole bookrunner of the Rule 144A deal, which has a greenshoe for up to an additional $14 million of notes.
The conversion price of $6.76 was based on the volume-weighted average price of shares over a three-day period consisting of two days prior to the announcement and one day after.
The notes are non-callable for three years until Feb. 15, 2017, and then are provisionally callable if the share price exceeds 130% of the conversion price.
The securities also have dividend and takeover protection.
Proceeds are earmarked for investments in the life settlement asset class, including by lending against portfolios of life insurance policies and by strategically acquiring life insurance policies in the secondary and tertiary markets. Imperial may also use a portion of proceeds to pay premiums on life insurance policies that it owns and for general corporate purposes, including working capital.
Imperial has agreed to seek approval of its stock holders at its next annual meeting for the issuance of more than 20% of Imperial's outstanding common stock upon conversion of the notes.
Boca Raton, Fla.-based Imperial Holdings is a specialty finance company.
| Issuer: | Imperial Holdings Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $70 million
|
| Greenshoe: | $14 million
|
| Maturity: | Feb. 15, 2019
|
| Bookrunner: | FBR Capital Markets & Co.
|
| Coupon: | 8.5%
|
| Price: | Par
|
| Yield: | 8.5%
|
| Conversion premium: | 25%
|
| Conversion price: | $6.76
|
| Conversion ratio: | 147.9290 shares
|
| Calls: | Non-callable for three years until Feb. 15, 2017, then provisionally callable at 130% price hurdle
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Price talk: | 8.5%-9%, up 20%-25%
|
| Pricing date: | Feb. 12
|
| Distribution: | Rule 144A
|
| Stock symbol: | NYSE: IFT
|
| Stock price: | $5.40 at close Feb. 12
|
| Market capitalization: | $114.6 million
|
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