New Issue: CenterPoint sells upsized $850 million mandatory convertible preferreds at 7%, up 20%

By Abigail W. Adams

Portland, Me., Sept. 26 – CenterPoint Energy Inc. priced an upsized $850 million of three-year series B mandatory convertible preferred stock prior to the market open on Wednesday at the midpoint of talk with a dividend of 7% and a threshold appreciation premium of 20%, according to an FWP filing with the Securities and Exchange Commission.

Price talk was for a dividend of 6.75% to 7.25% and an initial conversion premium of 17.5% to 22.5%, according to a market source.

Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC were joint bookrunning managers for the registered offering, which carries an upsized greenshoe of $127.5 million.

The offering consists of 17 million $50-par depositary shares representing a 1/20th interest in the series B convertible preferred stock.

The initial size of the deal had been for $750 million with a greenshoe of $112.5 million.

The company may redeem the depositary shares if its acquisition of Vectren Corp. is not completed by April 21, 2019 or upon an acquisition termination event. There is takeover and dividend protection.

The depositary shares will be listed for trade on the New York Stock Exchange under the ticker “CNPPrB.”

The deal priced concurrently with an upsized offering of $1.60 billion, or 60,550,459 shares, of common stock, which priced at $27.25 per share.

The initial size of the common stock offering was $1.5 billion. The common stock offering carries a greenshoe of 9,082,568 shares.

Net proceeds from the mandatory convertible preferred stock offering is expected to be $826 million, or $950 million if the greenshoe is exercised in full.

Proceeds will be used to fund the acquisition of Vectren.

CenterPoint is a Houston-based energy delivery company.

Issuer:	CenterPoint Energy Inc.
Securities:	Depositary shares representing 1/20th interest in $1,000-par series B mandatory convertible preferred stock
Amount:	$850 million or 17 million depositary shares
Greenshoe:	$127.5 million
Maturity:	Sept. 1, 2021
Bookrunners:	Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC, Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC
Senior co-managers:	Mizuho Securities USA LLC, MUFG and RBC Capital Markets LLC
Co-managers:	BNY Mellon Capital Markets, LLC, Comerica Securities, Inc., Evercore Group LLC, PNC Capital Markets LLC, R. Seelaus & Co., Inc., Regions Securities LLC, Samuel A. Ramirez & Co., Inc., TD Securities (USA) LLC, U.S. Bancorp Investments, Inc., Williams Capital Group, LP and WR Securities, LLC
Dividend:	7%
Price:	$50
Yield:	7%
Conversion premium:	20%
Conversion price:	$32.699
Floor price:	$9.5373
Preferreds conversion rate:	Minimum of 30.5820, maximum of 36.6980
Depositary conversion:	Minimum of 1.5291, maximum of 1.8349
Call options:	Upon an acquisition termination event or if acquisition of Vectren is not complete by April 21, 2019
Put options:	None
Pricing date:	Sept. 26
Settlement date:	Oct. 1
Talk:	Dividend of 6.75% to 7.25% and initial conversion premium of 17.5% to 22.5%
Concurrent offering	$1.65 billion, or 60,550,459 million shares, of common stock
Stock symbol:	NYSE: CNP
Preferred stock symbol:	NYSE: CNPPrB
Stock reference price:	$27.25 in concurrent offering
Market capitalization:	$11.93 billion

© 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.