By Rebecca Melvin
Princeton, N.J., Nov. 10 - Maverick Tube Corp. priced $220 million 20-year convertibles at par to yield 1.875% with an initial conversion premium of 21%, a syndicate source said.
The Rule 144A convertible senior subordinated notes priced within talk, which was for a coupon of 1.75% to 2.25% and an initial conversion premium of 20% to 25%.
Morgan Stanley & Co. was bookrunner for the deal.
A $30 million greenshoe is available.
The notes will be non-callable for eight years and will have puts in years eight, 10 and 15.
Conversion is possible after Aug. 15, 2013 at a rate of 24.6406 shares per $1,000 principal amount or a price of $40.58.
Earlier conversion is possible if the notes trade below 103% of the product of the last reported sale price of stock and the conversion rate for five consecutive trading days. There is no stock price trigger.
Maverick intends to use proceeds to repurchase its stock in the open market and in private transactions or for other general corporate purposes.
About $25.7 million of proceeds will be used to pay the net cost of the convertible note hedge and warrant transactions that will effectively increase the conversion price to $52.00 per share, or a premium of 55%, from the company's point of view.
Maverick is a steel tube manufacturer based in Chesterfield, Mo.
| Issuer: | Maverick Tube Corp.
|
| Issue: | Convertible senior subordinated notes
|
| Bookrunner: | Morgan Stanley & Co.
|
| Amount: | $220 million
|
| Greenshoe: | $30 million
|
| Maturity: | Nov. 15, 2025
|
| Coupon: | 1.875%
|
| Price: | Par
|
| Yield: | 1.875%
|
| Conversion premium: | 21%
|
| Conversion price: | $40.58
|
| Conversion ratio: | 24.6406
|
| Contingent conversion: | Yes, if the notes trade below 103% of the product of the stock price and the conversion rate for five consecutive days
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Calls: | Non-callable for eight years
|
| Puts: | In years eight, 10 and 15
|
| Pricing date: | Nov. 9
|
| Settlement date: | Nov. 15
|
| Distribution: | Rule 144A
|
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