New $1.5 billion mandatory deal from Crown Castle pushes past par; Becton paper rises

By Stephanie N. Rotondo

Seattle, July 21 – Crown Castle International Corp.’s $1.5 billion of 6.875% series A mandatory convertible preferred stock was all the rage in Friday trading, according to market sources.

The issue priced at par ahead of the open, coming with a 6.875% yield. That was tighter than the 7% to 7.5% initial price talk.

At day’s end, the mandatories were seen trading as high as a 104 handle.

At mid-morning, a trader saw the issue trading in a 102.5 to 103 context.

The underlying equity firmed smartly, rising $1.90, or 1.95%, to $99.17.

Morgan Stanley & Co. LLC, BofA Merrill Lynch, J.P. Morgan Securities LLC, Barclays and RBC Capital Markets LLC ran the deal.

The $1,000-par preferreds are mandatorily convertible on Aug. 1, 2020 at a conversion rate of 8.6806 common shares to 10.4167 common shares. Holders have the option to convert their shares at any time prior to that date at the minimum conversion rate.

The paper becomes redeemable, at the issuer’s option, if the planned acquisition of LTS Group Holdings LLC does not close by June 29, 2018.

Concurrently with the convertible preferred offering, Crown Castle also priced 36.5 million shares of its common stock at $96.00 per share, resulting in proceeds of $3.50 billion.

Proceeds from both offerings will be used to finance the Lightower transaction. If that deal doesn’t close, or if the purchase price is reduced, proceeds will be used for general corporate purposes, including the possible redemption of the new convertible preferreds, as well as the repurchase or repayment of debt.

On the heels of the new mandatory preferred issue, Becton Dickinson & Co.’s 6.125% series A mandatory convertible preferreds (NYSE: BDXA) was also being eyed.

The preferreds ended the day up 61 cents, or 1.09%, at $56.59, with almost 2.5 million shares being exchanged.

The company’s stock was also firmer, gaining $1.79 to close at $205.19.

Mentioned in this article:

Becton Dickinson & Co. NYSE: BDX

Crown Castle International Inc. NYSE: CCI

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