EDEN PRAIRIE, Minn. - Winnebago Industries, Inc. (NYSE: NYSE:WGO), a prominent manufacturer of outdoor lifestyle products, has announced the pricing of $300 million in convertible senior notes due 2030, with an interest rate of 3.25% per year. The offering is directed at qualified institutional buyers, with an additional option for the initial purchasers to buy up to $50 million more in notes within 13 days.
The notes are set to mature on January 15, 2030, and interest payments are scheduled semi-annually starting July 15, 2024. Conversion of the notes is subject to specific conditions and timeframes, with the initial conversion rate being 11.3724 shares per $1,000 principal amount, which is about a 30% premium over the closing stock price on January 18, 2024.
Winnebago also has the option to redeem the notes for cash under certain conditions starting January 15, 2028. The expected closing date of the sale is January 23, 2024, and the net proceeds are estimated at approximately $291.1 million, or $339.8 million if the additional notes option is exercised.
The proceeds are intended to fund the repurchase of $241 million of Winnebago's 1.50% Convertible Senior Notes due 2025 and for general corporate purposes. Part of the funds will also cover the cost of entering into convertible note hedge transactions, which aim to reduce potential dilution upon conversion of the notes.
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