By Kenneth Lim
Boston, June 13 - Sunstone Hotel Investors Inc. priced $220 million of 20-year exchangeable senior notes cheaper than talk on Tuesday to yield 4.6% with an initial exchange premium of 23.5%. The notes were reoffered at 98.75.
The deal was talked at a coupon of 4.3% to 4.6%, an initial exchange premium of 23% to 25% and a reoffer price of at 99.5.
The notes are issued by Sunstone's operating partnership, Sunstone Hotel Partnership LLC, and are exchangeable into Sunstone's common stock.
There is an over-allotment option for an additional $30 million.
Bear Stearns was the bookrunner for the Rule 144A offering.
The exchangeables are non-callable for the first 5.5 years and may be put in years 5.5, 10.5 and 15.5.
There is a contingent exchange trigger at 130% of the exchange price.
The exchangeables will have dividend and takeover protection.
Sunstone, a San Clemente, Calif.-based real estate investment trust with a portfolio of hotel properties, said it will use the proceeds to pay down a $175 million loan on the Hyatt Regency Century Plaza Hotel and to buy back up to $60.2 million of its common stock. Sunstone on Monday said its board approved a $100 million stock buyback program.
| Issuer: | Sunstone Hotel Partnership LLC
|
| Issue: | Exchangeable senior notes
|
| Exchange property: | Sunstone Hotel Investors Inc. common stock
|
| Bookrunner: | Bear Stearns
|
| Amount: | $220 million
|
| Greenshoe: | $30 million
|
| Maturity: | July 15, 2027
|
| Coupon: | 4.6%
|
| Price: | Par, reoffered at 98.75
|
| Yield: | 4.6%
|
| Exchange premium: | 23.5%
|
| Exchange price: | $34.50
|
| Exchange ratio: | 28.9855
|
| Contingent exchange: | 130%
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Call protection: | Non-callable before Jan. 20, 2013
|
| Puts: | Jan. 15, 2013; Jan. 15, 2018; Jan. 15, 2023
|
| Price talk: | 4.3%-4.6%, up 23%-25%, reoffered at 99.5
|
| Pricing date: | June 12, after the close
|
| Settlement date: | June 18
|
| Distribution: | Rule 144A
|
© 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.
