TiVo’s previously announced $120 million bond sale was so well received that it was increased to $150 million. The issue has been priced and could increase to $172.5 million if the full overallotment is picked up.
The $150 million of convertible senior notes due 2016 were priced with a coupon of 4%, with interest paid semi-annually. The underwriters have a 30-day option to purchase up to $22.5 million additional notes to cover overallotments.
According to TiVo, “The notes will be convertible at any time, at the option of the holders, into shares of TiVo’s common stock at an initial conversion rate of 89.6359 shares per $1,000 principal amount of notes. At the initial conversion rate, the initial conversion price will be approximately $11.16 per share, representing a conversion premium of approximately 27.5% based on the closing sale price of $8.75 per share of TiVo’s common stock on the Nasdaq Global Market on March 8, 2011. In addition, following certain corporate transactions that occur prior to the maturity date, TiVo will, in certain circumstances, increase the conversion rate for a holder that elects to convert its notes in connection with such a corporate transaction.”
RBR-TVBR observation: Once again the Wall Street bond market is red hot. Over and over companies have gone in to sell new bonds and found the reception so strong that they increased the offering size. And that 4% coupon looks pretty attractive as well.