Published on 5/4/2004 in the Prospect News Convertibles Daily.
New Issue: Albertson's $1 billion mandatory convertible yields 7.25%, up 25%
Nashville, May 4 - Albertson's Inc. sold $1 billion of three-year non-callable mandatory convertibles at par of 25 to yield 7.25% with a 25% initial conversion premium via sole bookrunner Banc of America Securities.
The issue sold at the aggressive end of price talk for a dividend at 7.25% to 7.75% and initial conversion premium between 20% and 25%.
The Boise, Idaho-based grocery chain intends to use proceeds to repay commercial paper borrowings in connection with the $2.5 billion acquisition of JS USA Holdings Inc., which operates under the banners of Shaw's and Star Markets, from J Sainsbury plc.
Terms of the deal are:
Issuer: | Albertson's Inc.
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Issue: | Hybrid Income Term Security Units
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Bookrunner: | Banc of America Securities
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Joint lead managers: | Credit Suisse First Boston and Merrill Lynch & Co.
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Amount: | $1 billion
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Greenshoe: | $150 million
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Maturity: | May 2007
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Coupon: | 7.25%
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Price: | Par, $25
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Yield: | 7.25%
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Conversion premium: | 25%
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Conversion price: | $28.825
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Conversion ratio: | 0.8673
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Call: | Non-callable
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Price talk: | 7.25-7.75%, up 20-25%
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Pricing date: | May 3, after the close
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Settlement date: | May 7
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Distribution: | Registered
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