By Rebecca Melvin
New York, July 21 - Powerwave Technologies Inc. priced $100 million of 30-year convertible senior subordinated notes at par to yield 2.75% with an initial conversion premium of 28.5%, according to a news release.
The total amount of the Rule 144A deal includes $20 million from a fully exercised over-allotment option.
Lazard Capital Markets LLC was the bookrunner.
The new paper will be convertible at about $3.12 per share.
The notes have an unusual accretion provision under which they will accrete principal at a rate of 5% per year compounded semiannually. Accreted principal will not accrue interest, will not be eligible for conversion into common stock and will only be payable to holders of the new notes upon reaching mandatory repurchase if the new notes are not converted before.
There is contingent conversion subject to shares being 130% of the conversion price for at least 20 out of 30 trading days.
Holders may put the notes on July 15, 2018, July 15, 2025 and July 15, 2032 at par plus interest.
Proceeds will be used to repurchase $42.6 million of Powerwave's existing 1.875% convertibles due 2024, leaving about $15.3 million of that issue outstanding, as well as to buy back about $25 million, or 11.2 million, common shares.
Remaining proceeds will be used to repurchase additional debt and for general corporate and working capital purposes.
Based in Santa Ana, Calif., Powerwave designs and makes wireless tower base station cabinets and antennas.
| Issuer: | Powerwave Technologies Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $100 million, including $20 million exercised greenshoe
|
| Maturity: | July 15, 2041
|
| Bookrunner: | Lazard Capital Markets LLC
|
| Coupon: | 2.75%
|
| Price: | Par
|
| Yield: | 2.75%
|
| Conversion premium: | 28.5%
|
| Conversion price: | $3.12
|
| Conversion ratio: | 320.3075
|
| Contingent conversion: | Yes, at 130%
|
| Puts: | On July 15, 2018, July 15, 2025 and July 15, 2032 at par
|
| Announcement date: | July 21
|
| Settlement date: | July 26
|
| Distribution: | Rule 144A
|
| Stock symbol: | Nasdaq: PWAV
|
| Stock price: | $2.23 at close July 20
|
| Market capitalization: | $400 million
|
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