By Rebecca Melvin
New York, March 23 - Kaiser Aluminum Corp. priced an upsized $150 million of five-year convertible senior notes after the market close Tuesday at par to yield 4.5% with an initial conversion premium of 26%, according to a syndicate source.
The Rule 144A deal was originally talked at $130 million in size. The greenshoe was upsized to $25 million from $20 million.
Pricing came toward the rich end of talk, which was for a yield of 4.5% to 5% and an initial conversion premium of 22.5% to 27.5%.
Other details of the issuance were not immediately available by Prospect News' deadline.
As previously reported, J.P. Morgan Securities Inc. and Bank of America Merrill Lynch were the joint bookrunners of the offering, with Wells Fargo Securities as the co-manager.
The bonds will be non-callable for life with no puts.
Proceeds were expected to be used to repurchase $50 million of common stock concurrently with the offering, to purchase a call spread and for general corporate purposes.
In connection with the offering, Kaiser Aluminum also expected to terminate an existing $265 million senior secured revolving credit facility and enter into a new $200 million four-year senior secured revolver providing for borrowings based upon advances against eligible accounts receivable and eligible inventory. The new credit facility is expected to close simultaneously with the pricing of the convertibles.
Based in Foothill Ranch, Calif., Kaiser is an aluminum products maker.
| Issuer: | Kaiser Aluminum Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $150 million, upsized from $130 million
|
| Greenshoe: | $25 million, upsized from $20 million
|
| Maturity: | 2015
|
| Bookrunners: | J.P. Morgan Securities Inc., Bank of America Merrill Lynch
|
| Co-manager: | Wells Fargo Securities
|
| Coupon: | 4.5%
|
| Price: | Par, $1,000
|
| Yield: | 4.5%
|
| Conversion premium: | 26%
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | 4.5%-5%, up 22.5%-27.5%
|
| Pricing date: | March 23
|
| Distribution: | Rule 144A
|
| Stock reference price: | $38.35
|
| Stock listing: | Nasdaq: KALU
|
| Market capitalization: | $767.8 million
|
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