By Abigail W. Adams
Portland, Me., June 20 – QTS Realty Trust Inc. priced an upsized $275 million of $100-par series B cumulative convertible perpetual preferred stock after the market close Wednesday on the cheap end of talk with a dividend of 6.5% and an initial conversion premium of 20%.
Price talk had been for a dividend of 6% to 6.5% and an initial conversion premium of 20% to 25%, according to a market source.
Deutsche Bank Securities Inc., Jefferies & Co. and Morgan Stanley & Co. Inc. are joint bookrunners for the registered offering, which carries an upsized greenshoe of $41.25 million.
The initial size of the deal had been $225 million with a greenshoe of $33.75 million.
The company may force conversion of the preferred stock on or after July 20, 2023 subject to a 150% hurdle.
There is dividend protection via a conversion rate adjustment at a threshold of 41 cents per quarter.
If a holder converts due to a fundamental change, the holder will be entitled to the greater of the sum of the underlying shares of common stock and the make-whole premium or the number of shares of common stock equal to the liquidation preference divided by the average price of common stock, according to a 424B5 filing with the Securities and Exchange Commission.
Proceeds will be used to repay indebtedness under the company’s revolving credit facility and for general corporate purposes.
QTS Realty is an Overland Park, Kan.-based data center operator.
| Issuer: | QTS Realty Trust Inc.
|
| Securities: | Series B cumulative convertible preferred stock
|
| Amount: | $275 million, or 2,750,000 shares
|
| Greenshoe: | $41.25 million, or 412,500 shares
|
| Maturity: | Perpetual
|
| Bookrunners: | Deutsche Bank Securities Inc., Jefferies & Co. and Morgan Stanley & Co. Inc.
|
| Dividend: | 6.5%
|
| Price: | Par of $100
|
| Conversion premium: | 20%
|
| Conversion price: | $47.03
|
| Conversion rate: | 2.1264
|
| Call options: | Non-callable
|
| Forced conversion | On or after July 20, 2023 subject to a 150% hurdle
|
| Pricing date: | June 20
|
| Settlement date: | June 25
|
| Talk: | Dividend of 6% to 6.5% and an initial conversion premium of 20% to 25%
|
| Stock symbol: | NYSE: QTS
|
| Stock price: | $39.19 at market close June 20
|
| Market capitalization: | $2.04 billion
|
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