By Stephanie N. Rotondo
Seattle, Sept. 21 – Marriott Vacations Worldwide Corp. priced $200 million of convertible senior notes due 2022 at par to yield 1.5% with an initial conversion premium of 30%, the company said in a press release on Thursday.
Pricing came in the middle of the 1.25% to 1.75% yield talk and the conversion premium talk of 27.5% to 32.5%.
J.P. Morgan Securities LLC, BofA Merrill Lynch and SunTrust Robinson Humphrey Inc. are the joint bookrunners for the Rule 144A deal.
There is a $30 million 13-day over-allotment option.
Conversions will be settled in cash, common stock, or both, at the company’s option. The initial conversion rate is 6.7482 shares per each $1,000 of notes, equal to $148.19 a share.
The bonds are contingently convertible prior to June 15, 2022. After that date, the paper can be converted at any time.
In connection with the deal, the Orlando-based pure-play vacation ownership company entered into privately negotiated convertible note hedge transactions with one or more initial purchasers of the notes. The company also entered into warrant transactions with the hedge counterparties.
The strike price of the warrants is $176.68, a 55% premium over the Sept. 20 closing share price.
About $40 million of the deal’s proceeds will be used to repurchase common stock from purchasers of the new notes via privately negotiated transactions. Proceeds will also be used to fund the hedging transactions and for general corporate purposes, which may include debt repayment, acquisitions, working capital, inventory, share repurchases and capital expenditures.
| Issuer: | Marriott Vacations Worldwide Corp.
|
| Securities: | Convertible senior notes
|
| Amount: | $200 million
|
| Greenshoe: | $30 million
|
| Maturity: | Sept. 15, 2022
|
| Bookrunners: | J.P. Morgan Securities LLC, BofA Merrill Lynch and SunTrust Robinson Humphrey Inc.
|
| Coupon: | 1.5%
|
| Price: | Par of $1,000
|
| Yield: | 1.5%
|
| Initial conversion premium: | 30%
|
| Initial conversion price: | $148.19 a share
|
| Initial conversion rate: | 6.7482 shares
|
| Contingent conversion: | Prior to June 15, 2022
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| Net share settlement: | Yes
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| Pricing date: | Sept. 20
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| Settlement date: | Sept. 25
|
| Distribution: | Rule 144A
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| Talk: | 1.25%-1.75% yield, up 27.5%-32.5%
|
| Stock symbol: | NYSE: VAC
|
| Stock reference price: | $113.99
|
| Market capitalization: | $3.15 billion
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