By Rebecca Melvin
New York, Sept. 10 – Dycom Industries Inc. priced an upsized $420 million of six-year convertible senior notes at par late Wednesday to yield 0.75% with an initial conversion premium of 30%, according to a company news release.
The Rule 144A deal was initially talked at $400 million in size. There is also a $65 million greenshoe, which was upsized from $60 million.
Pricing came at the midpoint of talked terms, which was for a 0.5% to 1% coupon and 27.5% to 32.5% premium.
Joint bookrunners were Goldman Sachs & Co. and BofA Merrill Lynch.
The notes are non-callable with no puts and have full dividend and takeover protection, as well as net shares settlement.
In connection with the pricing of the notes, Dycom has entered into convertible note hedge and warrant transactions. The strike on the warrants is $130.4275, which represents an initial conversion premium of 75% from the issuer’s perspective.
Also in connection with the pricing of the notes, Dycom has authorized the repurchase of up to $75 million of its common stock in privately negotiated transactions or in open market transactions and it intends to use $60 million of proceeds to refund the repurchase.
Proceeds will also be used to redeem the company’s 7.125% senior subordinated notes due 2021 and to pay the cost of a call spread.
Dycom is a Palm Beach Gardens, Fla.-based provider of specialty contracting services.
| Issuer: | Dycom Industries Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $420 million, upsized from $400 million
|
| Greenshoe: | $65 million, upsized from $60 million
|
| Maturity: | Sept. 15, 2021
|
| Bookrunners: | Goldman Sachs & Co., BofA Merrill Lynch
|
| Coupon: | 0.75%
|
| Price: | Par
|
| Yield: | 0.75%
|
| Conversion premium: | 30%
|
| Conversion price: | $96.89
|
| Conversion ratio: | 10.3211 shares
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes
|
| Call spread: | Yes, warrant strike price is $137.4275, which boosts the premium from the issuer’s perspective to 75%
|
| Net share settlement: | Yes
|
| Price talk: | 0.5%-1%, up 27.5%-32.5%
|
| Pricing date: | Sept. 9
|
| Stock symbol: | NYSE: DY
|
| Stock reference price: | $74.53 as of close Sept. 9
|
| Distribution: | Rule 144A
|
| Market capitalization: | $2.42 billion
|
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