Beazer greenshoe fully exercised, lifts mandatories to $57.5 million

By Devika Patel

Knoxville, Tenn., Jan. 12 - Underwriters for Beazer Homes USA Inc.'s offering of 7.5% three-year mandatory convertible subordinated notes exercised their over-allotment option in full for $7.5 million more of the mandatories, increasing the size of the issue to $57.5 million, the company said in an 8-K filed Tuesday with the Securities and Exchange Commission.

As previously reported, the company sold the mandatories at par of $25 in a registered off-the-shelf offering on Jan. 6, via joint bookrunners Citigroup Global Markets Inc. and Credit Suisse Securities. Deutsche Bank Securities Inc. and UBS Securities were joint lead managers and Moelis & Co. was co-manager.

The mandatories have a conversion premium of 22% and a conversion price of $5.61, which equals a conversion ratio of 4.4547.

The mandatories will be non-callable with no puts. There is standard dividend protection and make-whole for fundamental change.

Proceeds are expected to be used to redeem Beazer's 8.625% senior notes due 2011 and for other general corporate purposes, including funding or replenishing cash that has been used to fund repurchases of the outstanding senior notes that the company may make from time to time.

Beazer is an Atlanta-based homebuilder.

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