Nashville, Dec. 18 - Kroll Inc. sold $150 million of 10-year convertible notes at par to yield 1.75% with a 37.5% initial conversion premium via bookrunner Goldman Sachs & Co.
The Rule 144A deal priced aggressively outside of yield talk of 2.0% to 2.5% and at the aggressive end of premium guidance of 32.5% to 37.5%.
The issue is being sold on swap as the New York-based financial and security consulting firm said it would use a portion of proceeds to buy back 2 million shares of common stock simultaneously with the offering plus another 780,000 shares from time to time. The total number of shares involved equals the number of shares issuable upon conversion of Kroll's outstanding 6% senior subordinated convertible notes due 2006.
Kroll may redeem the 6% convertible notes any time after Nov. 14, and the company said it is likely that upon a call for redemption the holders of the 6% convertible notes would exercise their right to convert them.
Remaining proceeds will be used for general corporate purposes.
Terms of the deal are:
| Issuer: | Kroll Inc.
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| Issue: | Convertible subordinated notes
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| Bookrunner: | Goldman Sachs & Co.
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| Co-manager: | Bear Stearns & Co. Inc.
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| Amount: | $150 million
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| Greenshoe: | $25 million
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| Maturity: | Jan. 1, 2014
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| Coupon: | 1.75%
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| Price: | Par
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| Yield: | 1.75%
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| Conversion premium: | 37.5%
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| Conversion price: | $35.0625
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| Conversion ratio: | 28.5205
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| Call: | Non-callable for 5 years
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| Put: | In year 5
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| Contingent conversion: | 120%
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| Contingent payment: | 120%
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| Ratings: | Moody's: B2
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| S&P: B
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| Price talk: | 2.0-2.5%, up 32.5-37.5%
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| Pricing date: | Dec. 17, after the close
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| Settlement date: | Jan. 2
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| Distribution: | Rule 144A
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