Sempra greenshoe ups 6.75% convertible preferreds to $575 million

By Susanna Moon

Chicago, July 13 – Sempra Energy said underwriters fully exercised the $75 million over-allotment option on its 6.75% three-year par of $100 series B mandatory convertible preferred stock, brining the total deal size to $575 million.

In all, the company sold 5.75 million shares of the convertible preferreds, according to an 8-K filing with the Securities and Exchange Commission.

As reported, Sempra priced $500 million, or 5 million shares, of the convertible preferreds stock before the market open on July 11 at the midpoint of talk with a coupon of 6.75% and an initial conversion premium of 20%.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, BofA Merrill Lynch and Wells Fargo Securities LLC were the joint bookrunners for the registered offering.

Price talk was for a dividend of 6.5% to 7% and an initial conversion premium of 17.5% to 22.5%.

The preferred stock priced concurrently with $1.1 billion, or 9.75 million shares, of common stock at a public offering price of $113.75.

The common shares were sold to forward purchasers as part of a forward sales agreement with the initial forward sales price $111.873125 per share.

The concurrent offering included a greenshoe of $165 million, or 1,462,500 shares of common stock, which was also fully exercised.

The series B preferred stock will be mandatorily convertible on July 15, 2021 at a conversion rate no less than 0.7326 shares if the stock is greater than the $136.50 threshold appreciation price and no greater than 0.8791 if the stock is less than the initial price of $113.75.

The forward sales agreements will settle on or prior to Dec. 15, 2019.

Holders may convert the mandatory convertible preferred stock at any time prior to maturity at the minimum conversion rate of 0.7326.

Holders will be able to convert the series B mandatory convertible preferred stock at the fundamental change conversion rate upon a change of control.

The series B preferred stock will be listed on the New York Stock Exchange under the ticker “SREPrB.”

Proceeds will be used to repay outstanding commercial paper, for working capital and for general corporate purposes.

Sempra Energy is a San Diego-based natural gas utilities holding company.

© 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.