Morgan sells downsized $275 million exchangeable, into Nuveen, at 5.875%, up 20%
Nashville, April 7 - Morgan Stanley & Co. and Merrill Lynch & Co. each sold downsized $275 million exchangeables, which convert into Nuveen Investments Inc. Both issues were cut from $350 million in order to boost a secondary stock offering by The St. Paul Travelers Cos. Inc., although convertible officials said demand was strong for the exchangeables.
Merrill issued 2.5-year notes at par of 34 with a 6.75% coupon and 20% capped conversion premium. It priced at the cheap end of price talk for a 6.25% to 6.75% coupon.
Morgan issued 3.5-year notes at par of 34 with a 5.875% coupon and 20% capped conversion premium. It priced at the more aggressive end of price talk for a 5.75% to 6.25% coupon.
The offerings are part of St. Paul's divestiture of its 78% equity stake in the money manager Nuveen. In addition to the exchangeable, made possible by virtue of forward stock sale agreements with Merrill and Morgan, St. Paul sold 39.3 million of Nuveen shares at $34.00 in a public secondary offering and Nuveen repurchased $600 million of stock at a discounted price from St. Paul.
Terms of the new deals are:
| Issuer: | Merrill Lynch & Co.
|
| Issue: | Exchangeable mandatory senior unsecured securities
|
| Reference shares: | Nuveen Investments Inc.
|
| Placement agent: | Merrill Lynch
|
| Amount: | $275 million, cut from $350 million
|
| Maturity: | Oct. 15, 2007
|
| Dividend: | 6.75%
|
| Price: | Par, $34.00
|
| Yield: | 6.75%
|
| Conversion premium: | 20%
|
| Conversion price: | $34.00/$40.80
|
| Conversion ratio: | 0.8333/1.000
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call: | Non-callable
|
| Expected ratings: | Moody's: Aa3
|
| S&P: A+
|
| Price talk: | 6.25%-6.75%, up 20%
|
| Pricing date: | April 6, after the close
|
| Settlement date: | April 12
|
| Distribution: | Registered
|
|
|
| Issuer: | Morgan Stanley Inc.
|
| Issue: | Exchangeable mandatory senior unsecured securities
|
| Reference shares: | Nuveen Investments Inc.
|
| Placement agent: | Morgan Stanley
|
| Amount: | $275 million, cut from $350 million
|
| Maturity: | Oct. 15, 2008
|
| Dividend: | 5.875%
|
| Price: | Par, $34.00
|
| Yield: | 5.875%
|
| Conversion premium: | 20%
|
| Conversion price: | $34.00/$40.80
|
| Conversion ratio: | 0.8333/1.000
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call: | Non-callable
|
| Expected ratings: | Moody's: Aa3
|
| S&P: A+
|
| Price talk: | 5.75%-6.25%, up 20%
|
| Pricing date: | April 6, after the close
|
| Settlement date: | April 12
|
| Distribution: | Registered
|
|
|
© 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.
