By Rebecca Melvin and Jennifer Chiou
New York, Nov. 15 - Kaman Corp. announced the pricing of $100 million of convertible senior notes due 2017 after the market close on Monday to yield 3.25% with a conversion premium of 30%.
The offering was increased from the $75 million originally planned and priced at the tight end of the 3.25% to 3.75% talk. The initial conversion premium was anticipated at a range of 25% to 30%, according to a syndicate source.
The Rule 144A offering has a 13-day over-allotment option for a further $15 million - up from $11.25 million - of notes.
The initial conversion rate is 29.4499 shares per $1,000 principal amount of notes, working out to a $33.96 per share conversion price.
The seven-year notes, with no calls or puts, have standard cash takeover protection. There is contingent conversion subject to shares being 130% of the conversion price for a specified period.
Bank of America Merrill Lynch and RBS Global Banking & Markets are the joint bookrunners.
Proceeds from the Rule 144A offering will be used to pay down borrowings under Kaman's existing revolving credit agreement and for general corporate purposes, including future acquisitions and potential pension contributions.
Settlement is slated for Nov. 19.
Kaman is also entering into convertible note hedge transactions, the cost of which will be partially offset by warrant transactions, with the remainder paid for with proceeds. According to a company release, these transactions have the effect of increasing the conversion price to $44.40.
Kaman is a Bloomfield, Conn.-based aerospace and industrial distribution company.
| Issuer: | Kaman Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $100 million
|
| Greenshoe: | $15 million
|
| Maturity: | 2017
|
| Underwriters: | Bank of America Merrill Lynch and RBS Global Banking & Markets
|
| Coupon: | 3.25%
|
| Price: | Par
|
| Yield: | 3.25%
|
| Conversion premium: | 30%
|
| Conversion price: | $33.96
|
| Conversion ratio: | 29.4499
|
| Calls: | Non-callable
|
| Contingent conversion: | Yes, at 130%
|
| Pricing date: | Nov. 15
|
| Settlement date: | Nov. 19
|
| Distribution: | Rule 144A
|
| Stock symbol: | Nasdaq: KAMN
|
| Stock reference price: | $26.12 at close Nov. 15
|
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