Crown Castle greenshoe exercised, lifts convertibles to $1.65 billion

By Marisa Wong

Morgantown, W.Va., July 26 – Crown Castle International Corp. said it closed its offering of 6.875% mandatory convertible preferred stock, series A, raising $1.65 billion. The total amount includes $150 million from the full exercise of the underwriters’ over-allotment option.

As previously announced, Crown Castle priced $1.5 billion of the convertibles on Friday.

The conversion price is a 20% premium over the price at which a concurrent stock offering was sold.

The deal came tighter than the 7% to 7.5% dividend talk and at the rich end of the 15% to 20% premium talk.

Morgan Stanley & Co. LLC, BofA Merrill Lynch and J.P. Morgan Securities LLC are the joint bookrunners. Barclays and RBC Capital Markets LLC are also participating.

Dividends will be payable on the first day of February, May, August and November, beginning Nov. 1. Dividends may be paid in cash, stock or a combination of the two, subject to limitations.

The $1,000-par preferreds are mandatorily convertible on Aug. 1, 2020 at a conversion rate of 8.6806 common shares to 10.4167 common shares. Holders have the option to convert their shares at any time prior to that date at the minimum conversion rate.

The paper becomes redeemable, at the issuer’s option, if the planned acquisition of LTS Group Holdings LLC does not close by June 29, 2018.

There are standard dividend and change-of-control protections.

The company intends to list the new securities on the New York Stock Exchange under the ticker symbol “CCIPrA.”

Concurrently with the convertible preferred sale, Crown Castle also sold 40.15 million shares of its common stock at $96.00 per share, resulting in proceeds of about $3.85 billion.

Proceeds from both offerings will be used to finance the acquisition of Lightower. If that deal does not close, or if the purchase price is reduced, proceeds will be used for general corporate purposes, including the possible redemption of the new convertible preferreds, as well as the repurchase or repayment of debt.

Crown Castle is a Houston-based provider of wireless technology infrastructure.

© 2015 Prospect News.
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