By Toni Weeks
San Luis Obispo, Calif., March 3 – Gogo Inc. priced $340 million of five-year 3.75% convertible senior notes after the market close on Tuesday.
The notes are convertible at an initial conversion price of $23.85 per share, representing a 22.5% premium over the closing per-share price on March 3.
The company said on Tuesday that the deal would yield 3.25% to 3.75% with an initial conversion premium of 22.5% to 27.5%, according to market sources.
The Rule 144A offering has a $60 million greenshoe, upsized from $45 million, and is being sold via bookrunners J.P. Morgan Securities LLC and BofA Merrill Lynch.
The notes are non-callable. They have contingent conversion prior to Dec. 1, 2019 under certain circumstances. They will be settled in shares of common stock, cash or a combination.
The securities have takeover protection.
Settlement is expected March 9.
In connection with the offering of notes, Gogo entered into privately negotiated forward stock purchase transactions with initial purchasers of the notes, pursuant to which Gogo agreed to purchase about 7.19 million shares of common stock. The forward stock purchase transactions are expected to facilitate privately negotiated derivative transactions between the forward counterparties and holders of the notes including swaps.
A portion of net proceeds will be used to fund the cost of repurchasing stock pursuant to the forward stock purchase transactions. Remaining proceeds will be used for working capital and other general corporate purposes, including costs associated with developing next generation technology and possibly the acquisition of additional spectrum.
Itasca, Ill.-based Gogo provides in-flight internet connectivity and wireless digital entertainment.
| Issuer: | Gogo Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $340 million, upsized from $300 million
|
| Greenshoe: | $60 million, upsized from $45 million
|
| Maturity: | 2020
|
| Bookrunners: | J.P. Morgan Securities LLC and BofA Merrill Lynch
|
| Coupon: | 3.75%, payable semiannually
|
| Price: | Par
|
| Yield: | 3.75%
|
| Conversion price: | $23.85
|
| Conversion premium: | 22.5%
|
| Contingent conversion: | In some circumstances prior to Dec. 1, 2019; at any time thereafter
|
| Call: | No
|
| Pricing date: | March 3
|
| Settlement date: | March 9
|
| Distribution: | Rule 144A
|
| Stock symbol: | Nasdaq: GOGO
|
| Stock price: | $19.47 at close March 3
|
| Price talk: | 3.25% to 3.75% with an initial conversion premium of 22.5% to 27.5%
|
© 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.
