Nashville, July 27 - Marshall & Ilsley Corp. sold $365 million of three-year non-callable mandatory convertible units at par of 25 to yield 6.5% with a 24% initial conversion premium via joint bookrunners Goldman Sachs & Co. and JPMorgan Securities.
The issue priced at the wide end of dividend guidance of 6.0% to 6.5% and at the cheaper end of premium talk of 23% to 27%. It sold alongside $600 million of straight senior notes, which priced at 99.946 to yield 4.387% or a spread of 67 basis points over the five-year Treasury note.
The convertible also has dividend protection by way of a settlement rate adjustment for cash dividends on the common stock above the current common dividend yield level of roughly 2.18%.
The Milwaukee-based regional bank said proceeds from the offerings would be used to provide long-term financing for two recently completed acquisitions by subsidiary Metavante Corp. and to fund its pending acquisition of NYCE Corp.
Terms of the deal are:
| Issuer: | Marshall & Ilsley Corp.
|
| Issue: | Mandatory convertible units
|
| Lead managers: | Goldman Sachs & Co. and JPMorgan Securities
|
| Co-managers: | Citigroup Global Markets Inc. and Credit Suisse First Boston
|
| Amount: | $365 million
|
| Greenshoe: | $35 million
|
| Maturity: | Aug. 15, 2007
|
| Dividend: | 6.5%
|
| Price: | Par, $25
|
| Yield: | 6.5%
|
| Conversion premium: | 24%
|
| Conversion price: | $46.28
|
| Conversion ratio: | 0.5402
|
| Dividend protection: | Yes, settlement rate adjustment for cash dividends over 2.18%
|
| Call: | Non-callable
|
| Price talk: | 6.0-6.5%, up 23-27%
|
| Pricing date: | July 26
|
| Settlement date: | July 29
|
| Distribution: | Registered
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