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PG&E greenshoe lifts 4.25% convertibles to $2.15 billion
By Wendy Van Sickle
Columbus, Ohio, Dec. 4 – Underwriters for PG&E Corp.’s 4.25% four-year secured convertible notes fully exercised their $250 million greenshoe, increasing the total deal size to $2.15 billion, according to an 8-K filing with the Securities and Exchange Commission.
The company initially priced an upsized $1.9 billion of the convertibles after the market close on Nov. 29 at par at the rich end of talk with an initial conversion premium of 35%, as previously reported.
Price talk was for a coupon of 4.25% to 4.75% and an initial conversion premium of 30% to 35%.
J.P. Morgan Securities LLC (lead left), Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC were bookrunners for the Rule 144A offering.
The initial size of the issue was $1.5 billion with a greenshoe of $225 million.
The notes are non-callable.
They are putable upon a fundamental change.
The notes will be secured on a first-lien basis by PG&E’s 100% ownership interest of the common stock of subsidiary Pacific Gas and Electric Co.
The notes will rank junior to current and future secured obligations secured by assets and junior to secured obligations under its revolving credit facility.
They will be equal to other obligations secured by common stock and senior to the company’s unsecured obligations.
The notes will be settled in cash, shares or a combination of both at the company’s option with the intention to settle the notes in cash up to the principal amount.
Proceeds will be used alongside cash on hand to prepay the company’s outstanding $2.66 billion secured term loan maturing on June 23, 2025, which carries a floating interest rate that is currently 8.44%.
PG&E is an Oakland, Calif.-based utility company.
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