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Pier 1 Imports Convertible Notes offer opens
08 Feb '06
3 min read
Home furnishing maker Pier 1 Imports Inc announced that it had commenced an offering of $150 million of convertible senior notes due 2036 in a private offering.
In addition, the Company expects to grant the initial purchaser an option to purchase an additional $15 million aggregate principal amount of notes.
The notes pay interest semiannually and will be convertible upon the occurrence of specified events into a combination of cash and the Company's common stock, at a conversion rate to be determined.
The notes are guaranteed by certain of the Company's subsidiaries.
Upon conversion, the Company will pay cash equal to the lesser of the principal amount and the conversion value of such notes, and, if the conversion value exceeds the principal amount, shares of its common stock with a value equal to such excess.
In connection with the offering, the Company expects to enter into a convertible note hedge transaction with an affiliate of the initial purchaser of the notes to substantially increase the effective conversion premium of the notes.
This transaction is intended to reduce the potential dilution upon future conversion of the notes.
In connection with the transaction, the counterparty has advised the Company that it or its affiliates expect to enter into various derivative transactions with respect to the Company's common stock simultaneously with or shortly after the pricing of the notes.
In addition, following pricing of the notes, the counterparty or its affiliates may continue to purchase or sell shares of the Company's common stock in secondary market transactions, including during the observation period relating to any conversion of the notes.
In addition, the Company expects to grant the initial purchaser an option to purchase an additional $15 million aggregate principal amount of notes.
The notes pay interest semiannually and will be convertible upon the occurrence of specified events into a combination of cash and the Company's common stock, at a conversion rate to be determined.
The notes are guaranteed by certain of the Company's subsidiaries.
Upon conversion, the Company will pay cash equal to the lesser of the principal amount and the conversion value of such notes, and, if the conversion value exceeds the principal amount, shares of its common stock with a value equal to such excess.
In connection with the offering, the Company expects to enter into a convertible note hedge transaction with an affiliate of the initial purchaser of the notes to substantially increase the effective conversion premium of the notes.
This transaction is intended to reduce the potential dilution upon future conversion of the notes.
In connection with the transaction, the counterparty has advised the Company that it or its affiliates expect to enter into various derivative transactions with respect to the Company's common stock simultaneously with or shortly after the pricing of the notes.
In addition, following pricing of the notes, the counterparty or its affiliates may continue to purchase or sell shares of the Company's common stock in secondary market transactions, including during the observation period relating to any conversion of the notes.
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