By Rebecca Melvin
New York, July 16 – KEYW Holding Corp. priced an upsized $130 million of five-year convertible senior notes before the market open on Wednesday at par to yield 2.5% with an initial conversion premium of 22.5%, according to a news release.
The registered, off-the-shelf deal was initially talked at $125 million in size. There is a greenshoe of $19.5 million, which was upsized from $18.75 million.
Pricing came at the cheap end of talk, which was for a 2% to 2.5% coupon and a 22.5% to 27.5% premium.
The securities were sold via RBC Capital Markets LLC and BofA Merrill Lynch as joint bookrunners.
The notes are non-callable for life.
In connection with the pricing of the notes, KEYW entered into privately negotiated capped call transactions with the underwriters.
A portion of the proceeds will be used to pay the net cost of the capped call. The majority of proceeds will be used to repay the company’s outstanding balances under an existing credit facility, with remaining proceeds to be used for working capital, capital expenditures and other general corporate purposes, including potential acquisitions.
Hanover, Md.-based KEYW is a cyber-security services company.
| Issuer: | KEYW Holding Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $130 million, upsized from $125 million
|
| Greenshoe: | $19.5 million, upsized from $18.75 million
|
| Maturity: | July 21, 2019
|
| Bookrunners: | RBC Capital Markets LLC, BofA Merrill Lynch
|
| Co-manager: | SunTrust Robinson Humphrey Inc.
|
| Coupon: | 2.5%
|
| Price: | Par
|
| Yield: | 2.5%
|
| Conversion premium: | 22.5%
|
| Conversion price: | $14.83
|
| Conversion ratio: | 67.4093 shares
|
| Calls: | Non-callable
|
| Capped call: | Yes
|
| Price talk: | 2%-2.5%, up 22.5%-27.5%
|
| Pricing date: | July 16
|
| Settlement date: | July 21
|
| Stock symbol: | Nasdaq: KEYW
|
| Stock reference price: | $12.11 as of close July 15
|
| Distribution: | Registered, off the shelf
|
| Market capitalization: | $444.7 million
|
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