By Abigail W. Adams
Portland, Me., Sept. 18 – The Marcus Corp. price $87 million of five-year convertible notes after the market close on Thursday at par with a coupon of 5% and an initial conversion premium of 22.5%, according to a market source.
Pricing came at the rich end of talk for a coupon of 5% to 5.5% and at the midpoint of talk for an initial conversion premium of 20% to 25%.
J.P. Morgan Securities LLC and BofA Securities Inc. were joint bookrunners for the Rule 144A offering, which carries a greenshoe of $13 million.
The notes are contingently convertible until March 15, 2025.
They are non-callable.
The notes will be settled in cash, shares or a combination of both at the company’s option.
There is takeover and dividend protection.
In connection with the pricing of the notes, the company will enter into capped call transactions.
Net proceeds are expected to be $82.9 million, or $95.5 million if the greenshoe is exercised in full.
Approximately $14.7 million of the proceeds will be used to cover the cost of the call spread.
Remaining proceeds will be used to repay borrowings under its revolving credit facility and for general corporate purposes.
Marcus is a Milwaukee-based lodging and entertainment company.
| Issuer: | Marcus Corp.
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| Securities: | Convertible senior notes
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| Amount: | $87 million
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| Greenshoe: | $13 million
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| Maturity: | Sept. 15, 2025
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| Bookrunners: | J.P. Morgan Securities LLC and BofA Securities Inc.
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| Co-managers: | U.S. Bancorp Investments, Inc. (lead), BMO Capital Markets Corp. Fifth Third Securities, Inc. B. Riley Securities, Inc. Barrington Research Associates, Inc. and the Benchmark Co., LLC
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| Coupon: | 5%
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| Price: | Par
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| Yield: | 5%
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| Conversion premium: | 22.5%
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| Conversion price: | $11.01
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| Conversion rate: | 90.8038
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| Call options: | Non-callable
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| Put options: | None
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| Pricing date: | Sept. 17
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| Settlement date: | Sept. 22
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| Distribution: | Rule 144A
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| Talk: | Coupon of 5% to 5.5% and initial conversion premium of 20% to 25%
|
| Stock symbol: | NYSE: MCS
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| Stock price: | $8.99 at market close Sept. 17
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| Market capitalization: | $207.98 million
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