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Kaman greenshoe lifts seven-year 3.25% convertibles to $200 million
By Wendy Van Sickle
Columbus, Ohio, May 25 – Underwriters for Kaman Corp.’s $175 million of seven-year 3.25% convertible senior notes fully exercised their $25 million greenshoe, lifting the total deal size to $200 million, according to a press release.
The company priced $175 million of the convertibles on May 9 at par to yield 3.25% with an initial conversion premium of 25%.
The deal came at the rich end of the 3.25% to 3.75% yield talk and on the cheap side of the 25% to 30% premium talk.
BofA Merrill Lynch, J.P. Morgan Securities LLC and UBS Securities LLC are the joint bookrunners on the Rule 144A deal.
Conversions will be settled in cash, common stock or a combination, at the company’s option. The conversion price is $65.26 per share, or 15.3227 shares per each $1,000 of notes.
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 event 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.
About $17.9 million of the proceeds will go toward the capped call transactions. Another $165.3 million will be used to repurchase about $103.5 million principal amount of convertible notes coming due Nov. 15. Any remaining funds will be used to repay debt under an existing credit agreement.
Kaman is a Bloomfield, Conn.-based diversified company that conducts business in the aerospace and distribution markets.
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