By Abigail W. Adams
Portland, Me., April 19 – Ship Finance International Ltd. priced $150 million of five-year convertible notes prior to the market open on Thursday at the cheap end of talk with a coupon of 4.875% and an initial conversion premium of 27.5%.
Price talk had been for a coupon of 4.375% to 4.875% and an initial conversion premium of 27.5% to 32.5%, according to a market source.
Morgan Stanley & Co. LLC, Jefferies LLC and Citigroup Global Markets Inc. are bookrunners for the registered offering, which carries a greenshoe of $22.5 million.
The notes are non-callable and have no put options.
In connection with the convertible note offering, Ship Finance will enter into share lending agreements with the underwriters for up to 7 million shares of common stock.
The borrowed shares are newly issued and will be cancelled or held as treasury shares at the end of the share lending agreement, according to a company news release.
Purchasers of the notes may sell up to 7 million borrowed shares, which the company expects will be used to establish their initial hedge positions in the notes.
Proceeds will be used for general corporate purposes, which may include the pursuit of business combinations, acquisitions, expansion, repayment of debt or share repurchases, according to a company news release.
Ship Finance is a Hamilton, Bermuda-based limited liability company focused on investments in the maritime industry.
| Issuer: | Ship Finance International Ltd.
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| Securities: | Convertible senior notes
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| Amount: | $150 million
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| Greenshoe: | $22.5 million
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| Maturity: | May 1, 2023
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| Bookrunners: | Morgan Stanley & Co. LLC, Jefferies LLC and Citigroup Global Markets Inc.
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| Co-managers: | DNB Markets, Inc., Seaport Global Securities LLC, BTIG, LLC, ABN AMRO Securities (USA) LLC and ING Financial Markets LLC
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| Coupon: | 4.875%
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| Price: | Par
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| Conversion premium: | 27.5%
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| Conversion price: | $18.93
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| Conversion rate: | 52.8157
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| Call option: | Non-callable
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| Put option: | None
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| Pricing date: | April 19
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| Talk: | 4.375% to 4.875% and an initial conversion premium of 27.5% to 32.5%
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| Stock symbol: | NYSE: SFL
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| Stock price: | $14.85 at market close April 18
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| Market capitalization: | $1.54 billion
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