By Wendy Van Sickle
Columbus, Ohio, June 21 – Universal American Corp. priced its $115 million of 4% convertible senior notes due 2021, including a fully exercised $15 million greenshoe, via a Rule 144A offering, the company said in a press release on Tuesday.
Pricing of the deal came at terms that were fixed ahead of marketing, including a 4% coupon and $9.44 initial conversion price, according to a market source.
The initial conversion rate of 105.8890 shares of common stock per $1,000 principal amount is equivalent to the $9.44 per share conversion price, which is a premium of about 13.1% to Tuesday’s closing share price, when the deal priced. But the offering was marketed with a $7.26 reference price, implying an initial conversion premium of 30%, according to a market source.
The notes are non-callable with no investor puts. They will be convertible into stock, cash or a combination of cash or stock at the issuer’s option.
Goldman Sachs and Co. was the bookrunner.
Proceeds will be used, along with cash on hand, to repurchase all the shares of common stock held by affiliates of Perry Capital and Welsh, Carson, Anderson & Stowe for $6.80 per share, totaling about $123 million. The stock repurchase price equaled a nearly 20% discount to Tuesday’s closing share price.
The company also plans to repurchase about $15 million of its common stock from purchasers of the notes concurrently with the closing of this offering.
The health care company is based in White Plains, N.Y.
| Issuer: | Universal American Corp.
|
| Securities: | Convertible senior notes
|
| Amount: | $115 million, including fully exercised $15 million greenshoe
|
| Maturity: | 2021
|
| Bookrunner: | Goldman Sachs & Co.
|
| Coupon: | 4%
|
| Price: | Par, $1,000
|
| Yield: | 4%
|
| Initial conversion premium: | 13.1%, or 30% based on $7.26 reference price
|
| Initial conversion price: | $9.44 per share
|
| Initial conversion rate: | 105.8890
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Pricing date: | June 21
|
| Settlement date: | June 27
|
| Distribution: | Rule 144A
|
| Price talk: | 4%, up 13%
|
| Stock symbol: | NYSE: UAM
|
| Stock price: | $8.35 at close on June 21
|
| Reference price: | $7.26
|
| Market capitalization: | $633.5 million
|
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