By Kenneth Lim
Boston, Feb. 28 - Mentor Graphics Corp. priced $175 million of 20-year convertible subordinated debentures with a coupon of 6.25% and an initial conversion premium of 60%, syndicate sources confirmed.
The securities priced at par and mature on March 1, 2026. Each bond can be exchanged for 55.6545 Mentor Graphics shares based on a conversion price of $17.97.
The deal came at the cheap end of price talk, which had guided for a coupon of 5.75% to 6.25%, up 60% to 70%.
Bookrunners Merrill Lynch & Co., Banc of America Securities and UBS Investment Bank also have a greenshoe option of $25 million.
The deal is distributed under Rule 144A.
The convertible bonds are non-callable for five years, and have puts in years seven, 10 and 15. The contingent conversion threshold is set at 120%, and the securities are protected in takeover situations. The conversion ratio will also be adjusted if Mentor Graphics decides to pay dividends. The company does not currently have a dividend policy.
Wilsonville, Ore.-based Mentor Graphics provides software used in electronic design.
It is using proceeds from the issue to buy back its existing 6.875% convertible bonds due 2007. If the greenshoe is exercised, it will use the extra proceeds to repurchase part of its floating-rate convertible bonds due 2023.
| Issuer: | Mentor Graphics Corp.
|
| Issue: | Convertible subordinated debentures
|
| Bookrunner: | Merrill Lynch, Banc of America, UBS.
|
| Amount: | $175 million
|
| Greenshoe: | $25 million
|
| Maturity: | March 1, 2026
|
| Coupon: | 6.25%
|
| Price: | Par
|
| Yield: | 6.25%
|
| Conversion premium: | 60%
|
| Conversion price: | $17.97
|
| Conversion ratio: | 55.6545
|
| Contingent conversion: | 120%
|
| Contingent payment: | None
|
| Dividend protection: | Conversion ratios will be adjusted for future dividends.
|
| Takeover protection: | Yes
|
| Hard-call protection: | 5 years
|
| Puts: | Years 7, 10, 15
|
| Price talk: | 5.75%-6.25%, up 60-70%
|
| Pricing date: | Feb. 27, after close
|
| Settlement date: | March 3
|
| Distribution: | Rule 144A
|
| Symbol: | Nasdaq: MENT
|
|
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
