By Rebecca Melvin
New York, April 2 - SVB Financial Group priced $200 million of three-year convertible senior notes at par on Tuesday to yield 3.875% with an initial conversion premium of 23.5%, according to a company news release.
The deal priced at the cheap end of talk for the coupon, which was 3.375% to 3.875%, and toward the cheap end of talk for the initial conversion premium, which was 22.5% to 27.5%.
The Rule 144A deal, sold via bookrunner J.P. Morgan Securities Inc., included a $50 million greenshoe.
The notes are non-callable, and there are no puts. They have standard dividend and takeover protection.
SVB has entered into convertible note hedge transactions and warrant transactions with certain counterparties and intends to use a portion of proceeds from the offering to pay for the cost of the convertible note hedge transactions.
The convertible note hedge and warrant transactions increase the effective conversion price of the notes from the company's perspective to more than $64.43 per share, 50% above the closing stock price of $42.95 on the pricing date.
The company expects to use most of the proceeds, or about $150 million, to cash settle that portion of its obligation upon conversion of its 0% convertible subordinated notes, which are due on June 15, 2008.
Any proceeds from the greenshoe will be used to enter into additional convertible note hedge transactions and for general corporate purposes.
SVB is a Santa Clara, Calif.-based financial services company.
| Issuer: | SVB Financial Group.
|
| Issue: | Convertible senior notes
|
| Amount: | $200 million
|
| Greenshoe: | $50 million
|
| Maturity: | April 15, 2011
|
| Bookrunner: | J.P. Morgan Securities Inc.
|
| Coupon: | 3.875%
|
| Price: | Par
|
| Yield: | 3.875%
|
| Conversion premium: | 23.5%
|
| Conversion ratio: | 18.8525
|
| Conversion price: | $53.04
|
| Call: | Non-callable
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Pricing date: | April 1
|
| Settlement date: | April 7
|
| Distribution: | Rule 144A
|
| Price talk: | 3.375% to 3.875%, up 22.5% to 27.5%
|
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