By Angela McDaniels
Tacoma, Wash., March 25 - Melia Hotels International SA priced €200 million convertible notes due 2018 at par to yield 4.5% with a 34% conversion premium, according to a company news release.
Price talk was 3.75% to 4.5% for the coupon and 30% to 35% for the conversion premium.
BofA Merrill Lynch, BNP Paribas and UBS Investment Bank are the underwriters.
The initial conversion price is €7.318. The notes are convertible beginning 41 days after the closing date. The issuer has a cash settlement option.
The notes are callable if 90% or more of the securities have been converted and/or purchased. In addition, the notes are callable at par beginning three years and 15 days after closing if the product of the conversion ratio and the closing share price exceeds 130% of par for at least 20 trading days out of any 30 consecutive trading days.
The notes are putable at par upon a change of control or if the core shareholder, meaning companies owned by Gabriel Escarrer Julia, acquires more than 80% of the voting rights of the company.
Proceeds will be used to refinance short-term debt, with priority given to the company's €300 million syndicated loans.
The company said the issue is part of its strategy of refinancing its short-term debt maturities and increasing the proportion of its financing obtained through the capital markets. Melia may access the bond market to refinance other debt maturities falling in 2013 and 2014.
Melia is a hotel chain based in Palma de Mallorca, Spain.
| Issuer: | Melia Hotels International SA
|
| Issue: | Convertible notes
|
| Amount: | €200 million
|
| Maturity: | April 4, 2018
|
| Underwriters: | BofA Merrill Lynch, BNP Paribas, UBS Investment Bank
|
| Coupon: | 4.5%, payable quarterly
|
| Price: | Par of €100,000
|
| Yield: | 4.5%
|
| Conversion premium: | 34%
|
| Conversion price: | €7.318
|
| Conversion ratio: | 13,664.93
|
| Call option: | Provisionally callable at par subject to 130% price hurdle beginning three years and 15 days after closing; clean-up call if 10% or less of notes remain outstanding
|
| Put option: | At par upon change of control or if core shareholder acquires more than 80% of company voting rights
|
| Price talk: | 3.75% to 4.5%, up 30% to 35%
|
| Pricing date: | March 25
|
| Settlement date: | April 4
|
| Stock symbol: | Madrid: MEL.MC
|
| Stock price: | €5.46 at close March 22
|
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