Resource Capital Corp. priced about $132.2 million aggregate principal amount of its 4.50% convertible senior notes due 2022, including $110.0 million in an underwritten public offering and an additional of about $22.2 million in exchange for the same amount of outstanding convertible notes of the company.
The company granted the underwriters an option to buy up to about $11.6 million aggregate principal amount of additional notes solely to cover any overallotments.
The notes will be senior unsecured obligations of the company. The offering is expected to close Aug. 16.
Interest on the notes will be payable semiannually in arrears Feb. 15 and Aug. 15 of each year, beginning Feb. 15, 2018. The notes will mature Aug. 15, 2022, unless earlier repurchased or converted.
On conversion, holders of the notes will receive common shares, cash, or a combination of cash and shares, at the company's election.
The initial conversion rate for each $1,000 principal amount of the notes is approximately 78.2473 common shares, equivalent to a conversion price of approximately $12.78 per common share, which is a 20% premium to the closing price of the company's common shares Aug. 10. The company may not redeem the notes before the maturity date.
Resource Capital intends to use the net proceeds to repurchase a portion of its 6% convertible senior notes due 2018 and its 8% convertible senior notes due 2020. Any remaining net proceeds will be used for general corporate purposes.
Credit Suisse Securities (USA) LLC is acting as book runner for the offering, and JMP Securities LLC is acting as co-manager.