By Rebecca Melvin
Princeton, N.J., June 20 - Alleghany Corp. priced $260.6 million three-year mandatory convertible preferred shares at par of $264.60 to yield 5.75%, with an initial conversion premium of 18%, according to a syndicate source.
The shares priced at the cheap end of talk, which was for a dividend of 5.25% to 5.75% with an initial conversion premium of 18% to 22%.
There is a greenshoe of $30 million, or 147,000 shares.
Bookrunner for the registered deal was Merrill Lynch and Co, with Wachovia Capital Markets LLC, Dowling & Partners Securities LLC and Janney Montgomery Scott LLC acting as co-managers.
The three-year preferred shares have dividend and takeover protection.
Proceeds of the deal will be added to capital and surplus of its insurance operating units, including contributions to commercial property operations of its RSUI Group subsidiary, and for general corporate purposes.
Alleghany is a New York City-based property and casualty insurer.
| Issuer: | Alleghany Corp.
|
| Issue: | Mandatory convertible preferred shares
|
| Bookrunner: | Merrill Lynch and Co.
|
| Amount: | $260.6 million
|
| Greenshoe: | $30 million
|
| Maturity: | June 15, 2009
|
| Coupon: | 5.75%
|
| Price: | Par, $264.60
|
| Yield: | 5.75%
|
| Conversion premium: | 18%
|
| Conversion price: | $312.23
|
| Conversion ratio: | Minimum: 0.8475 to Maximum: 1 share
|
| Dividend protection: | Yes, via conversion ratio adjustment
|
| Takeover protection: | Yes, via make-whole discount rate of 6.65%
|
| Price talk: | Dividend: 5.25%-5.75%
|
| Initial conversion premium: 18%-22%
|
| Pricing date: | June 19
|
| Settlement date: | June 23
|
| Distribution: | Registered
|
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