By Stephanie N. Rotondo
Seattle, May 18 – Atlas Air Worldwide Holdings Inc. priced an upsized $260 million of seven-year convertible senior notes at par to yield 1.875% with an initial conversion premium of 32.5%, a market source reported on Thursday.
The underwritten public offering came upsized from $250 million and at the cheap end of the 1.375% to 1.875% yield talk and the cheap end of the 32.5% to 37.5% premium talk.
The offering was announced late Tuesday.
Morgan Stanley & Co. LLC, BNP Paribas Securities Corp. and Citigroup Global Markets Inc. are the joint bookrunners.
The deal includes a $39 million 13-day over-allotment option. That was increased from $37.5 million.
Conversions will be settled in cash, common stock or a combination, at the company’s option. The notes will be contingently convertible prior to Sept. 1, 2023 and convertible at any time after that date.
The initial conversion rate is 16.3713 shares per each $1,000 of notes, equal to $61.08 per share.
The notes are non-callable. Holders can put the issue in the event of a fundamental change.
In connection with the deal, Atlas entered into privately negotiated convertible note hedge transactions as well as separate privately negotiated warrant transactions with certain financial institutions. The strike price of the warrant transactions is $92.20 a share, a 100% premium over the May 17 closing share price of $46.10.
Proceeds will be used to repay higher-cost revolving credit facility borrowings, to enhance business and financial flexibility, to support long-term growth, to fund the cost of hedging transactions and for general corporate purposes.
Atlas Air is a Purchase, N.Y.-based provider of outsourced aircraft and aviation operating services.
| Issuer: | Atlas Air Worldwide Holdings Inc.
|
| Securities: | Convertible senior notes
|
| Amount: | $260 million
|
| Greenshoe: | $39 million
|
| Maturity: | June 1, 2024
|
| Bookrunners: | Morgan Stanley & Co. LLC, BNP Paribas Securities Corp. and Citigroup Global Markets Inc.
|
| Co-lead managers: | Credit Agricole Securities (USA) Inc. and J.P. Morgan Securities LLC
|
| Co-managers: | CJS Securities, Inc., Cowen and Co. LLC, Seaport Global Securities LLC and Sidoti & Co. LLC
|
| Coupon: | 1.875%
|
| Price: | Par of $1,000
|
| Yield: | 1.875%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $61.08 a share
|
| Conversion rate: | 16.3713 shares
|
| Call options: | None
|
| Put options: | Upon a fundamental change
|
| Pricing date: | May 18
|
| Settlement date: | May 23
|
| Talk: | 1.375% to 1.875% yield, up 32.5% to 37.5%
|
| Stock symbol: | Nasdaq: AAWW
|
| Stock price: | $46.10 as of May 17 close
|
| Market capitalization: | $1.161 billion
|
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