Walter Industries greenshoe exercised, raising convertibles to $175 million

New York, April 21 - Walter Industries Inc. said the underwriters of its recent offering of convertible senior subordinated notes due 2024 exercised the $25 million greenshoe in full, raising the size of the deal to $175 million.

The Tampa, Fla.-based diversified company originally priced $150 million of the securities after the market closed on April 14 to yield 3.75% with a 37.5% initial conversion premium.

Bookrunners for the Rule 144A deal were Morgan Stanley & Co. and Banc of America Securities.

Walter Industries used $25 million of the proceeds to purchase shares owned by certain affiliates of Kohlberg Kravis Roberts & Co., which together currently hold around 33.3% of Walter Industries stock, at an agreed price of $12.75 per share.

A further $13 million of the proceeds were used to buy 1 million shares sold short by buyers of the convertibles at $12.99 per share. An additional $112.4 million was used to repay the company's term loan plus accrued interest.

Remaining proceeds will be used for general corporate purposes, including acquisitions and additional repurchases of common stock.

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