New York, March 6 - MGIC Investment Corp. priced an upsized $450 million of seven-year convertibles notes late Wednesday to yield 2% with a 35% initial conversion premium.
The deal came at the rich end of revised talk.
Terms were revised twice during marketing, a New York-based trader said.
The coupon was tightened to 2% to 2.5% from an initially talked yield of 3.75% to 4.25%, and the initial conversion premium was tightened to 30% to 35% from an initially talked 27.5% to 32.5% premium.
MGIC also priced 135 million shares at $5.15 per share.
The registered offerings were sold via bookrunner Goldman Sachs & Co.
The notes have an over-allotment option of up to an additional $50 million of notes, an amount left unchanged, and the shares have a 20.25 million share greenshoe.
The notes are non-callable until April 10, 2017 and then are provisionally callable subject to a 130% price hurdle. There are no puts.
There is change-of-control protection and dividend protection in the form of a conversion rate adjustment for any dividends paid.
Proceeds from the two offerings of more than $1.1 billion will be used for general corporate purposes, which may include increasing the company's insurance subsidiary capital and other subsidiaries and improving liquidity by providing funds for debt service.
MGIC is a Milwaukee-based mortgage insurer.
| Issuer: | MGIC Investment Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $450 million
|
| Greenshoe: | $50 million
|
| Maturity: | 2020
|
| Coupon: | 2%
|
| Conversion premium: | 35%
|
| Conversion price: | $6.95
|
| Conversion rate: | 143.8332
|
| Call: | From April 10, 2017 subject to 130% hurdle
|
| Puts: | None
|
| Dividend protection: | Conversion rate adjustment
|
| Pricing date: | March 6, after close
|
| Bookrunner: | Goldman, Sachs & Co.
|
| Talk: | 2% to 2.5%, up 30% to 35%, from 3.75% to 4.25%, up 27.5% to 32.5%
|
| Stock price: | $5.61 at close March 6, $5.15 for current stock sale
|
| Market capitalization: | $1.13 billion
|
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