By Rebecca Melvin
New York, Nov. 29 - Meritor Inc. priced an upsized $250 million of 7.875% convertible senior notes due March 1, 2026, including a fully exercised $25 million greenshoe, according to a news release.
Initially the deal was talked as a $150 million base deal with a $22.5 million greenshoe.
Pricing of the Rule 144A offering came at a discounted price of 90, as expected, and toward the cheap end of coupon talk, which was 7.5% to 8%, for a yield of 9.7%, according to a syndicate source.
The initial conversion price of the notes is $12.00, representing a 200% premium to the closing share price of $4.00 for the underlying shares on the Nasdaq stock market Wednesday.
The deal was sold via joint bookrunners BNP Paribas Securities Corp., UBS Investment Bank, J.P. Morgan Securities LLC and RBS Securities Inc.
The bonds are non-callable until Dec. 1, 2020, with a put on Dec. 1, 2020. They have contingent conversion at a 120% price hurdle. And there is dividend and takeover protection.
Proceeds of the Rule 144A offering will be used to repay debt and for general corporate purposes.
Meritor is a Troy, Mich.-based auto components maker.
| Issuer: | Meritor Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $250 million, upsized from $150 million and including $25 million greenshoe
|
| Maturity: | March 1, 2026
|
| Bookrunners: | BNP Paribas Securities Corp., UBS Investment Bank, J.P. Morgan Securities LLC, RBS Securities Inc.
|
| Coupon: | 7.875%
|
| Price: | $900, discount to $1,000 par
|
| Yield: | 9.7%
|
| Conversion premium: | 200%
|
| Conversion price: | $12.00
|
| Conversion ratio: | 83.3333
|
| Call: | Non-callable until Dec. 1, 2020
|
| Put: | On Dec. 1, 2020
|
| Contingent conversion: | Yes, at 120%
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Net share settlement: | Yes
|
| Price talk: | 7.5% to 8%, discounted at 90, with $12.00 initial conversion price
|
| Pricing date: | Nov. 28, after the close
|
| Settlement date: | Dec. 4
|
| Distribution: | Rule 144A
|
| Stock symbol: | Nasdaq: MTOR
|
| Stock reference price: | $4.00
|
| Market capitalization: | $401.51 million
|
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