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Marriott Vacations greenshoe lifts 0% convertibles to $575 million
By Wendy Van Sickle
Columbus, Ohio, Feb. 3 – Underwriters for Marriott Vacations Worldwide Corp.’s priced 0% five-year convertible notes fully exercised their $75 million greenshoe, lifting the total deal size to $575 million, according to an 8-K filing with the Securities and Exchange Commission.
The company priced $500 million of the convertibles after the market close on Jan. 27 at par with a coupon of 0% and an initial conversion premium of 40%, as previously reported.
Pricing came at the rich end of initial talk for a coupon of 0% to 0.5% and richer than initial talk for an initial conversion premium of 32.5% to 37.5%.
J.P. Morgan Securities LLC and BofA Securities Inc. were active bookrunners for the Rule 144A offering.
The notes are non-callable.
They will be settled in cash, shares or a combination of both at the company’s option.
The notes will be unsecured but guaranteed by Marriott Ownership Resorts Inc.
In connection with the pricing of the notes, the company entered into convertible note hedge and warrant transactions.
The strike price on the warrant transaction is $213.7625, which represents a 75% premium over the last reported sales price of stock.
Proceeds will be used to cover the cost of the hedge transactions, to finance the acquisition of Welk Resorts, to repay certain Welk Resorts debt, to repay a portion of the company’s term loan and for general corporate purposes.
Marriott previously announced its intention to acquire Welk Resorts for $430 million in cash and 1.4 million shares of common stock.
Marriott Vacations is an Orlando, Fla.-based global vacation company.
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