By Rebecca Melvin
New York, Nov. 11 - TeleCommunication Systems Inc. priced $90 million of five-year convertible senior notes after the close of markets Tuesday to yield 4.5% with a 30% initial conversion premium, according to a release.
The effect of a call spread that the company entered into with counterparties will increase the effective conversion premium of the notes from the company's perspective to 60%.
The Rule 144A deal came at the rich end of talk for the coupon, which was 4.5% to 5%, and beyond the rich end of talk for the conversion premium, which was 22.5% to 27.5%.
There is a $13.5 million greenshoe for the deal that was sold via Oppenheimer & Co. and Raymond James.
The conversion ratio is 96.637 and the conversion price is $10.35. The notes will be non-callable, with no puts.
Proceeds are for general corporate purposes, including investment in or acquisition of businesses, products and technologies complementary to its own. Also a portion of proceeds are being used to pay the cost of the convertible note hedge transactions. The company is also entering into warrant transactions.
Annapolis, Md.-based TeleCommunication Systems engineers and delivers wireless communications technology.
| Issuer: | TeleCommunication Systems Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $90 million
|
| Greenshoe: | $13.5 million
|
| Maturity: | Nov. 1, 2014
|
| Bookrunners: | Oppenheimer & Co. and Raymond James
|
| Coupon: | 4.5%
|
| Price: | Par of $1,000
|
| Yield: | 4.5%
|
| Conversion premium: | 30%
|
| Conversion price: | $10.35
|
| Conversion ratio: | 96.637
|
| Call protection: | Non-callable
|
| Puts: | No puts
|
| Price talk: | 4.5%-5%, up 22.5%-27.5%
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Pricing date: | Nov. 10
|
| Settlement: | Nov. 16 |
|
| Distribution: | Rule 144A
|
| Stock symbol: | Nasdaq: TSYS
|
| Stock reference price: | $7.96
|
| Market capitalization: | $387.4 million
|
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