Marcus talks $87 million five-year convertible notes to yield 5%-5.5%, up 20%-25%

By Abigail W. Adams

Portland, Me., Sept. 17 – The Marcus Corp. plans to price $87 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 5% to 5.5% and an initial conversion premium of 20% to 25%, according to a market source.

J.P. Morgan Securities LLC and BofA Securities Inc. are joint bookrunners for the Rule 144A offering, which carries a greenshoe of $13 million.

The notes are contingently convertible until March 15, 2025.

They are non-callable.

The notes will be settled in cash, shares or a combination of both at the company’s option.

There is takeover and dividend protection.

In connection with the pricing of the notes, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, to repay borrowings under its revolving credit facility and for general corporate purposes.

Marcus is a Milwaukee-based lodging and entertainment company.

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