Stanley Black & Decker to sell $650 million three-year equity units at 5.5%-6% yield, up 15%-20%

By Stephanie N. Rotondo

Seattle, May 11 – Stanley Black & Decker Inc. is offering $650 million of equity units due 2020, with each unit containing a three-year forward contract to purchase common stock and one share of 0% series C convertible perpetual preferred stock, the company said in a press release on Thursday.

Price talk on the $100-par units is for a yield of 5.5% to 6% with an initial conversion premium of 15% to 20%, a market source reported.

Pricing is expected after Thursday’s close.

Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. and Wells Fargo Securities LLC are the joint bookrunners.

The deal will include a $97.5 million greenshoe.

Conversions will be settled in cash, stock, or a combination, at the company’s option. The preferred shares can only be converted upon separation in May 2020. Prior to that date, the paper can only be converted in certain circumstances.

The new securities will be listed on the New York Stock Exchange under the ticker symbol “SWP.”

Proceeds will be used for general corporate purposes, including the repayment of short-term borrowings. The company will also use some of the funds for capped-call transactions.

Stanley Black & Decker is a New Britain, Conn.-based diversified global provider of hand tools, power tools and related accessories, electronic security solutions, health care solutions, engineered fastening systems and more.

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