By Susanna Moon
Chicago, Oct. 30 – Sears Holdings Corp. gave more details of its rights offering for stockholders to purchase up to $625 million principal amount of 8% senior notes due 2019 and warrants. The plans were announced Oct. 20.
Under the rights offering, the company said it will distribute to its stockholders one transferable subscription right for every 85.1872 common shares held of record as of 5 p.m. ET on Oct. 30, according to a company press release.
Each subscription right allows the holder to purchase at a subscription price of $500 one unit consisting of a $500 principal amount 8% senior notes due 2019 and 17.5994 five-year warrants, each warrant for one share.
The rights offering will run from Nov. 3 until 5 p.m. ET on Nov. 18.
The subscription rights have been approved for listing on the Nasdaq under the symbol “SHLDZ” and will begin trading Oct. 31 until 4 p.m. ET on Nov 13.
As previously announced, the warrants are exercisable at $28.41, the closing market price on Oct. 17.
At closing of the rights offering, the components of the units will immediately separate and become transferable separately, a previous press release noted.
Proceeds of the rights offering will be used for general corporate purposes.
Edward S. Lampert, chairman and chief executive officer of the company and chairman and chief executive officer of ESL Investments, Inc. and affiliated investment funds, plan to exercise their pro rata portion of the subscription rights in full, though they have not entered into any agreement to do so, the previous release said.
Fairholme Capital Management, LLC also expects that some of its clients will participate in the rights offering.
Holders of subscription rights who fully exercise all of their subscription rights may also make a request to purchase additional units through the exercise of an over-subscription privilege, but the company said it cannot assure investors that any over-subscriptions will be filled.
Sears is a Hoffman Estates, Ill.-based retailer.
| Issuer: | Sears Holdings Corp.
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| Issue: | Units of $500 principal amount 8% senior notes and 17.5994 five-year warrants
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| Amount: | $625 million
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| Maturity: | 2019
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| Coupon: | 8%
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| Price: | $500
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| Warrants: | 17.5994
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| Warrant expiration: | Five years
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| Warrant strike price: | $28.41
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| Announcement date: | Oct. 20
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| Pricing date: | Oct. 30
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| Offer period: | Nov. 3-Nov. 18
|
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