Business News
Alcoa Announces Successful Pricing on Common Stock and Convertible Debt Offerings
Thursday 19. March 2009 - Alcoa Inc. (NYSE: AA) today announced that it has successfully priced its public offerings of common stock and convertible notes.
The offerings were made pursuant to the Company’s registration statement and prospectuses filed with the Securities and Exchange Commission. Total proceeds from the offerings are approximately $1.3 billion.
The Company announced that it has agreed to sell 150 million shares of its common stock at a public offering price of $5.25 per share. The Company has also granted the underwriters an option to purchase up to an additional 22.5 million shares of common stock on the same terms and conditions to cover over-allotments, if any.
The Company also announced the pricing of its public offering of $500 million aggregate principal amount of 5.25% convertible notes due 2014, reflecting an increase from the initial amount of $250 million. The Company has granted the underwriters an option to purchase up to an additional $75 million principal amount of convertible notes on the same terms and conditions to cover over-allotments, if any. The convertible notes will pay interest semi-annually at a rate of 5.25% and will mature on March 15, 2014 unless earlier repurchased or converted. The convertible notes will be convertible at the holders option into shares of Alcoa common stock at a conversion rate of 155.4908 shares of common stock per $1,000 principal amount of convertible notes, equivalent to a conversion price of approximately $6.43 per share of common stock, subject to adjustment in certain circumstances.
The Company intends to use the net proceeds from the offerings to repay outstanding indebtedness under its senior unsecured 364-day revolving credit facility. The Company intends to use any remaining proceeds for general corporate purposes.
The offerings are expected to close on March 24, 2009, subject to customary closing conditions. The closing of each offering is not contingent on the closing of the other.
Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. Incorporated, Barclays Capital Inc. and Citigroup Global Markets Inc. are the joint book-running managers.