SBA intends to offer some $350 million of convertible senior notes due October 2014 under a 144A private placement offering to institutions. SBA also expects to grant the initial purchasers an option to purchase up to $50 million of additional notes to cover over-allotments. Prior to July 22, 2014, the notes will be convertible at agreed to terms.
The company also intends to use a portion of the offering proceeds to enter into convertible note hedge transactions to reduce the potential dilution to the common stock with an initial strike price of roughly 180% of the price at the time of the offering. This will also replace a hedging transaction from 2007.
We have not seen any trade indications, but $350 million compares to a market cap of $3.12 billion and compares to total debt of over $2.548 billion and total liabilities of $2.719 billion.
Jon C. Ogg
April 20, 2009
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