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Under Armour greenshoe lifts four-year convertibles to $500 million
By Sarah Lizee
Olympia, Wash., May 28 – Initial purchasers of Under Armour Inc.’s four-year convertible notes exercised their $60 million greenshoe in full on Tuesday, increasing the total deal size to $500 million, according to an 8-K filing with the Securities and Exchange Commission.
As previously reported, the company priced an upsized $440 million of the convertible notes after the market close on May 21 at par with a coupon of 1.5% and an initial conversion premium of 27.5%, according to a company news release.
Pricing came at the midpoint of talk for a coupon of 1.25% to 1.75% and at the cheap end of talk for an initial conversion premium of 27.5% to 32.5%, according to a market source.
J.P. Morgan Securities LLC, BofA Securities Inc. and SunTrust Robinson Humphrey Inc. were bookrunners for the Rule 144A offering.
The initial size of the offering was $400 million.
The notes are contingently convertible until Jan. 1, 2024.
They are non-callable until Dec. 6, 2022 and then subject to a 130% hurdle with a make-whole.
They are putable upon a fundamental change.
The notes will be settled in cash, shares or a combination of both at the company’s option.
In connection with the offering, the company entered into capped call transactions with a cap price of $13.475, which represents a premium of 75% over the last reported sales price of stock.
Net proceeds are expected to be $487.8 million with the greenshoe exercised in full.
About $42.1 million of net proceeds will be used to cover the cost of the call spread with the remaining amount to be used to repay debt under its revolving credit facility.
Under Armour is a Baltimore-based marketer and distributor of athletic performance apparel.
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