Kaman to sell $175 million seven-year convertible senior notes at 3.25%-3.75% yield, up 25%-30%

By Stephanie N. Rotondo

Seattle, May 8 – Kaman Corp. is offering $175 million of seven-year convertible senior notes via a Rule 144A offering, the company said in a press release on Monday.

Price talk is for a 3.25% to 3.75% yield and an initial conversion premium of 25% to 30%, according to a market source.

Pricing is expected after Monday’s close.

BofA Merrill Lynch, J.P. Morgan Securities LLC and UBS Securities LLC are the joint bookrunners.

There is a $25 million 13-day greenshoe.

Conversions will be settled in cash, common stock or a combination, at the company’s option.

The issue is non-callable for life. The paper is contingently convertible prior to Nov. 1, 2023, should the stock hit a 130% price hurdle. After that date, the notes can be converted at any time.

Holders can put the issue in the vent of a change of control.

In connection with the deal, Kaman expects to enter into capped call transactions with one or more of the initial purchasers and/or their affiliates.

A portion of the proceeds will go toward the capped call transactions. The remaining funds will be used to repay existing debt and for general corporate purposes.

Kaman is a Bloomfield, Conn.-based diversified company that conducts business in the aerospace and distribution markets.

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