SBA greenshoe fully exercised, lifts 4% convertibles to $500 million

By Devika Patel

Knoxville, Tenn., April 22 - Underwriters for SBA Communications Corp.'s 4% convertible senior notes due October 2014 exercised their over-allotment option in full for $50 million more of the convertibles, increasing the size of the issue to $500 million, the company said in a press release.

As previously reported, the company sold $450 million of the convertibles at par on April 20 in a Rule 144A offering via joint bookrunners Citigroup Global Markets Inc., Barclays Capital, Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Wachovia Securities LLC.

There is an initial conversion premium of 22.5% and a conversion ratio of 32.9164, which equals a conversion price of $30.38.

The notes are non-callable for life and have no puts. Prior to July 22, 2014, the notes will be convertible only upon specified events. After that they are convertible at any time. The notes may be settled in cash, shares of SBA class A common stock, or a combination of both.

Settlement is expected on April 24.

Proceeds will be used to repurchase 2.02 million class A common shares for $50 million. In addition, SBA expects to use some of the proceeds to fund the cost of its convertible note hedge transactions. The remaining proceeds will be used for general corporate purposes.

Boca Raton, Fla.'s SBA Communications is an independent owner and operator of wireless communications towers.

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