Titan International Inc. has closed its offering of $172.5 million principal amount of 5.625% Convertible Senior Subordinated Notes due 2017. The notes included the exercise in full of the initial purchasers’ option to purchase $22.5 million principal amount of additional notes to cover over-allotments.
The Notes were offered and sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended and to other investors pursuant to another applicable exemption from registration.
(For more information, see "Titan to offer $75 million in senior notes" and "Titan doubles size of notes offering.")
Titan received net proceeds from the offering of approximately $166.1 million after deducting initial purchasers’ discounts and estimated offering expenses. Titan intends to use the proceeds from the offering for general corporate purposes, including:
* financing potential future acquisitions and
* repayment of existing debt obligations.
The notes will bear cash interest semiannually at an annual rate of 5.625%. Upon conversion, the company will deliver a number of shares of its common stock as described in the offering circular.
The initial base conversion rate for the notes will be 93.0016 shares of Titan common stock per $1,000 principal amount of notes, equivalent to an initial base conversion price of approximately $10.75 per share of Titan common stock.
If the price of Titan common stock at the time of determination exceeds the base conversion price, the base conversion rate will be increased by an additional number of shares (up to 9.3002
shares of Titan common stock per $1,000 principal amount of notes) as determined pursuant to a formula described in the offering circular. The base conversion rate will be subject to adjustment in certain events.
The initial base conversion price represents a premium of 37.5% relative to the Dec. 15, 2009, closing sale price of Titan common stock.
Titan will have the right to redeem the notes in whole or in part at a specified redemption price on or after Jan. 20, 2014, if the closing sale price of its common stock exceeds 130% of the base conversion price then in effect for 20 or more trading days in a period of 30 consecutive trading days ending on the trading day immediately prior to the date of the redemption notice.
The notes will be subordinated in right of payment to Titan’s existing 8% senior notes due 2012.
