By Rebecca Melvin
New York, March 13 - Meadowbrook Insurance Group Inc. priced an upsized $85 million of seven-year convertible senior notes after the market close Tuesday at par to yield 5% with an initial conversion premium of 37.5%, according to a syndicate source.
Pricing for the Rule 144A deal came at the cheap end of talk, which was for a 4.5% to 5% coupon and 37.5% to 42.5% premium.
J.P. Morgan Securities LLC was the bookrunner.
The greenshoe was upsized to $15 million from $11.25 million.
The notes are non-callable for seven years with no puts. There is takeover protection.
Proceeds will be used primarily to make capital contributions to the company's subsidiaries to support their operations and financial strength, with the balance going to repay debt and to purchase a call spread to mitigate potential dilution of shares upon conversion of the bonds.
Southfield, Mich.-based Meadowbrook is a specialty commercial insurance underwriter operating through a network of independent retail and other agents.
| Issuer: | Meadowbrook Insurance Group Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $85 million, upsized from $75 million
|
| Greenshoe: | $15 million, upsized from $11.25 million
|
| Maturity: | March 15, 2020
|
| Bookrunner: | J.P. Morgan Securities LLC
|
| Co-managers: | FBR Capital Markets & Co., RBS Securities Inc.
|
| Coupon: | 5%
|
| Price: | Par
|
| Yield: | 5%
|
| Conversion premium: | 37.5%
|
| Conversion price: | $9.18
|
| Conversion ratio: | 108.8732
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Call spread: | Yes, details undisclosed
|
| Price talk: | 4.5%-5%, up 37.5%-42.5%
|
| Pricing date: | March 12
|
| Settlement date: | March 18
|
| Stock symbol: | NYSE: MIG
|
| Stock price: | $6.68 at close March 12
|
| Distribution: | Rule 144A
|
| Market capitalization: | $332.5 million
|
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