Published on 9/23/2003 in the Prospect News Convertibles Daily.
New Issue: CKE Restaurants upsized $90 million convertible yields 4%, up 27%
By Ronda Fears
Nashville, Sept. 23 - CKE Restaurants Inc. sold an upsized $90 million of 20-year convertible notes at par to yield 4% with a 27% initial conversion premium - at the aggressive end of guidance.
Citigroup was bookrunning lead manager of the Rule 144A deal, which had been talked to yield 4.0% to 4.5%, up 23% to 27%.
The Santa Barbara, Calif. quick-service restaurant company plans to use proceeds to repay part of its 4.25% convertible subordinated notes due 2004. The company intends to retire the remainder of that issue by replacing its existing $100 million senior credit facility with a new $150-175 million facility and drawing down those funds.
Terms of the new deal are:
Issuer: CKE Restaurants Inc.
Issue: | Convertible subordinated notes
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Lead manager: | | Citigroup
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Amount | $90 million, up from $75 million
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Greenshoe: | $15 million, unchanged
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Maturity: | Oct. 1, 2023
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Coupon: | 4.0%
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Price: | Par
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Yield: | 4.0%
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Conversion premium: | 27%
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Conversion price: | $8.89
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Conversion ratio: | 112.4859
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Call: | Non-callable for 5 years
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Put: | In years 5, 10 and 15, in cash only
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Contingent conversion: | 110%
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Price talk: | 4.0-4.5%, up 23-27%
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Pricing date: | Sept. 23, after the close
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Settlement: | Sept. 29
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Distribution: | Rule 144A
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| Note: In the Sept. 22 edition of Prospect News Convertible Daily, the headline on a report about this offering incorrectly described it as a convertible preferred. Rather, it is an offering of 20-year convertible subordinated notes.
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