By Rebecca Melvin
New York, June 18 – Restoration Hardware Holdings Inc. priced $300 million of 0%, five-year convertible senior notes after the market close Wednesday with an initial conversion premium of 35%, according to a release.
Pricing of the Rule 144A deal came at the rich end of talk, which was for a 0% to 0.5% coupon and 30% to 35% premium.
BofA Merrill Lynch and Goldman Sachs & Co. were joint bookrunners of the offering for which there is a $50 million greenshoe.
The notes are non-callable and have net share settlement.
In connection with the notes, the company entered into convertible note hedge and warrant transactions, or a call spread. The strike on the warrants is $172.00, which boosts the initial conversion premium to 100% from the issuer’s perspective.
Proceeds will be used to pay the net cost of the call spread and for general corporate purposes, including repayment of all of the outstanding debt under the company’s credit facility.
Corte Madera, Calif.-based Restoration Hardware is a specialty retailer.
| Issuer: | Restoration Hardware Holdings Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $300 million
|
| Greenshoe: | $50 million, upsized from $25 million
|
| Maturity: | June 15, 2019
|
| Bookrunner: | BofA Merrill Lynch and Goldman Sachs & Co.
|
| Coupon: | 0%
|
| Price: | Par
|
| Yield: | 0%
|
| Conversion premium: | 35%
|
| Conversion price: | $116.09
|
| Conversion ratio: | 8.6143 shares
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Net share settlement: | Yes
|
| Call spread: | Yes; strike on the warrants is $172.00, representing a 100% premium from the issuer’s perspective
|
| Price talk: | 0%-0.5%, up 30%-35%
|
| Pricing date: | June 18
|
| Settlement date: | June 24
|
| Stock symbol: | NYSE: RH
|
| Stock reference price: | $85.99 as of close June 18
|
| Distribution: | Rule 144A
|
| Market capitalization: | $3.4 billion
|
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