Kaman greenshoe fully exercised, lifting convertibles to $115 million

By Devika Patel

Knoxville, Tenn., Nov. 19 - Underwriters for Kaman Corp.'s 3.25% convertible senior notes due Nov. 1, 2030 exercised their over-allotment option in full for $15 million more of the convertibles, increasing the size of the issue to $115 million, the company said in an 8-K filed Friday with the Securities and Exchange Commission.

As previously reported, the company sold the convertibles at par on Nov. 15 in a Rule 144A offering via joint bookrunners Bank of America Merrill Lynch and RBS Global Banking & Markets.

The convertibles have a conversion premium of 30% and an initial conversion price of $33.96, which equals a conversion ratio of 29.4499.

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.

Proceeds 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.

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 news release, these transactions have the effect of increasing the conversion price to $44.40 from the company's perspective.

Kaman is a Bloomfield, Conn.-based aerospace and industrial distribution company.

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