Maverick Tube greenshoe exercised in full, raising convertibles offering to $250 million

By Jennifer Chiou

New York, Nov. 18 - Maverick Tube Corp. announced its $30 million greenshoe was fully exercised, augmenting its 1.875% convertibles senior subordinated notes due 2025 offering to $250 million.

The notes were priced on Nov. 9 at par to yield 1.875% with an initial conversion premium of 21%.

Maverick also said it entered into convertible note hedge and warrant transactions for its stock with an affiliate of Morgan Stanley, the initial purchaser of the notes.

The company said it is aiming to reduce the potential dilution upon future conversion of the additional notes by providing itself the option to acquire shares, which offsets the delivery of newly issued shares upon settlement of note conversions. As a result, the effective conversion price of the notes to the company increased to $52.00 from $40.58 per share.

Maverick added it has committed $190.9 million of proceeds from the $250 million offering to repurchase 5.6 million of its shares. The company noted it used $29.3 million in proceeds for the convertible note hedge and warrant transactions.

Remaining proceeds will go towards repurchasing additional Maverick stock.

Maverick is a steel tube manufacturer based in Chesterfield, Mo.

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