By Rebecca Melvin
New York, May 5 - Beazer Homes USA Inc. priced $75 million of 3.25-year tangible equity units late Tuesday, which will pay a distribution fee of 7.25% with an initial conversion premium of 22%, according to a prospectus.
There is an $11.25 million over-allotment option.
The units, with a par of $25 each, came at the midpoint of price talk, which was for a yield of 7% to 7.5% and an initial conversion premium of 20% to 25%.
The tangible equity units are comprised of a prepaid stock purchase contract and a senior amortizing note due 2013.
Beazer may accelerate conversion of the stock purchase contracts at the maximum conversion rate, or at the minimum rate if the share price is greater than 130% of conversion price, and investors will have the right to require Beazer to repurchase the amortizing note.
Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC were the joint bookrunners, with Deutsche Bank Securities Inc. as a joint lead manager and Moelis & Co. as the co-manager.
Proceeds will be used to fund the redemption of Beazer's 8.375% senior notes due 2012 and its 4.625% convertible senior notes due 2024 and for other general corporate purposes.
The company has applied to list the units on the New York Stock Exchange under the symbol "BZU."
Beazer is an Atlanta-based homebuilder.
| Issuer: | Beazer Homes USA Inc.
|
| Issue: | Tangible equity units
|
| Amount: | $75 million
|
| Greenshoe: | $11.25 million
|
| Maturity: | Aug. 15, 2013
|
| Underwriters: | Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC
|
| Joint lead manager: | Deutsche Bank Securities Inc.
|
| Co-manager: | Moelis & Co.
|
| Distribution rate: | 7.25%
|
| Price: | Par, $25
|
| Yield: | 7.25%
|
| Threshold appreciation price: | $7.12
|
| Minimum settlement rate: | 3.5126 shares
|
| Maximum settlement rate: | 4.3029 shares
|
| Initial conversion premium: | 22%
|
| Call protection: | Non-callable
|
| Puts: | No puts
|
| Dividend protection: | Yes, standard conversion ratio adjustments
|
| Takeover protection: | Yes, standard table for fundamental change
|
| Price talk: | 7%-7.5%, up 20%-25%
|
| Pricing date: | May 4
|
| Settlement date: | May 10
|
| Distribution: | Registered
|
| Stock symbol: | NYSE: BZH
|
| Stock price: | $5.81 at close May 4
|
| Equity unit symbol: | NYSE: BZU
|
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