By Kenneth Lim
Boston, July 25 - United Airlines parent UAL Corp. on Tuesday priced $726 million of 15-year convertible senior limited-subordination notes, at a coupon of 4.5% and an initial conversion premium of 25% over the two-day volume-weighted average stock price.
The convertibles were offered at par, and are guaranteed by United Airlines Inc. The initial conversion price of $34.84 is a 26.6% premium to UAL's closing stock price of $27.51 on Tuesday.
United Airlines Inc. is the guarantor for the notes.
Goldman Sachs was the bookrunner of the Rule 144A deal.
The convertibles are non-callable for the first five years, and there are puts in years five and 10.
There is full dividend protection. The notes may be put in a change of control situation, but there is no make-whole adjustment.
The convertibles were issued to UAL's employee unions as part of the airline's reorganization scheme, and the unions in turn sold the convertibles. UAL Corp. will not receive any of the proceeds.
| Issuer: | UAL Corp.
|
| Issue: | Convertible senior limited-subordination notes
|
| Bookrunner: | Goldman Sachs
|
| Amount: | $726 million
|
| Maturity: | June 30, 2021
|
| Coupon: | 4.5%
|
| Price: | Par
|
| Yield: | 4.5%
|
| Conversion premium: | 25% over the 2-day volume-weighted average stock price
|
| Conversion price: | $34.84
|
| Conversion ratio: | 28.7026
|
| Dividend protection: | Yes
|
| Takeover protection: | Change of control put, no premium make-whole
|
| Call protection: | Non-callable 5 years
|
| Puts: | Years 5, 10
|
| Price talk: | 4.5%, up 25%
|
| Pricing date: | July 25
|
| Settlement date: | July 28
|
| Guarantees: | United Airlines Inc.
|
| Distribution: | Rule 144A
|
|
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