By Kenneth Lim
Boston, March 30 - Strategic Hotels & Resorts Inc. priced $150 million of five-year exchangeable senior notes cheaper than talk on Thursday to yield 3.5% with an initial conversion premium of 20% and a reoffered price of 99.5.
The notes were originally offered at par and priced after the market closed. They were talked at a coupon of 3% to 3.5% and an initial exchange premium of 20%.
The notes are issued by Strategic Hotel Funding LLC and are exchangeable into common stock of the Strategic Hotels & Resorts.
There is an over-allotment option for a further $30 million.
Deutsche Bank, Citigroup and JP Morgan were the bookrunners of the Rule 144A offering.
The notes are non-callable.
There is a contingent exchange trigger at 125% of the exchange price.
The notes have dividend and takeover protection.
Strategic Hotels & Resorts, a Chicago-based real estate investment trust that focuses on upscale hotels, will use the proceeds to enter into capped call transactions, to buy back up to $25 million of its common stock, to repay outstanding bank debt and to fund general purposes.
| Issuer: | Strategic Hotels Funding LLC
|
| Issue: | Exchangeable senior notes
|
| Exchange property: | Strategic Hotels & Resorts Inc. common stock
|
| Bookrunners: | Deutsche Bank, Citigroup and JP Morgan
|
| Amount: | $150 million
|
| Greenshoe: | $30 million
|
| Maturity: | April 1, 2012
|
| Coupon: | 3.5%
|
| Price: | Par, reoffered at 99.5
|
| Yield: | 3.5%
|
| Exchange premium: | 20%
|
| Exchange price: | $27.70
|
| Exchange ratio: | 36.1063
|
| Contingent conversion: | 125%
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Price talk: | 3%-3.5%, up 20%
|
| Pricing date: | March 29, after the close
|
| Settlement date: | April 4
|
| Distribution: | Rule 144A
|
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