Fleetwood Enterprises Inc. announced today (Dec. 17) that it has priced its $80 million debt offering at 5%, slightly above the current 4% prime interest rate.
The RV and manufactured home builder is offering the $80 million in new debt to “qualified institutional buyers.” Fleetwood anticipates closing the sale of the $80 million in convertible senior subordinated debentures on Monday (Dec. 22). The initial buyer also will get 30 days to decide whether to purchase an additional $20 million worth of the debentures.
Fleetwood plans to use the proceeds from the sale of the new debt to pay-off some old debt and for working capital and other general corporate purposes.
The holders of the debentures will have the right to require Fleetwood to buy-back all or a portion of the debt on Dec. 15, 2008, Dec. 15, 2013, or on Dec. 15, 2018.
Fleetwood could use cash, its own common stock or a combination of cash and stock to repurchase the debentures.
Fleetwood’s announcement of the debt offering earlier this week apparently has resulted it a decline in its stock price. Fleetwood’s stock closed at $10.20 a share in New York Stock Exchange trading on Friday (Dec. 12) but it closed at $9.26 a share on Tuesday (Dec. 16).