NEW BRITAIN, Conn., March 15 /PRNewswire-FirstCall/ -- The Stanley
Works (NYSE: SWK) ("Stanley" or the "Company") announced today that it
priced concurrent offerings of its Equity Units and notes. The Equity Units
offering priced yesterday and the notes offering priced today. Both
offerings are being made under the Company's existing shelf-registration
statement previously filed with the Securities and Exchange Commission and
are expected to close on March 20, 2007.
Notes
The Company is offering $200 million in aggregate principal amount of
unsecured notes due 2010. The notes will bear interest at a rate of 5.00%
per annum. The price to investors will be 99.856% of the principal amount
of the notes for an effective yield of 5.035%. The Company will receive
gross proceeds of $200 million from the sale of the notes, before deducting
underwriters' discounts and commissions.
Equity Units
The Company is offering $300 million in Equity Units, each with a
stated amount of $1000 and initially consisting of a purchase contract and
a $1000 principal amount senior convertible note due May 17, 2012. The
purchase contracts will obligate the holders to purchase from the Company,
on May 17, 2010, for a price of $1000 in cash, a variable number of shares
of common stock, which will not exceed 18.3660 shares, subject to
adjustments, depending on the average closing price of the Company's common
stock over the 20 day period ending on the third trading day prior to such
date. Quarterly contract adjustment payments will be made equivalent to
5.125% per year on the stated amount of $1,000 per Equity Unit. The $300
million in aggregate principal amount of convertible senior notes mature in
2012, will pay interest quarterly at an annual rate of 3-month LIBOR minus
3.500%, and have a conversion rate of 15.4322 shares of common stock,
equivalent to a conversion price of approximately $64.80, subject to
adjustment. The convertible notes will be remarketed in the future, at
which time the floating rate spread on the convertible notes will be reset,
subject to a floor of LIBOR minus 3.500% points. The Company will receive
gross proceeds of $300 million from the sale of the Equity Units, before
deducting the underwriters' discount and estimated offering expenses.
Stanley granted the underwriters an option to purchase up to 30,000 Equity
Units to cover overallotments.
Trading of the Equity Units on the New York Stock Exchange is expected
to begin on March, 20, 2007, under the symbol "SWK EQ10".
In an effort to reduce potential dilution of Stanley's common stock
upon conversion of the convertible notes, Stanley also intends to enter
into convertible note hedge and warrant transactions with counterparties
that will be affiliates of the underwriters. These counterparties have
informed Stanley that in connection with establishing their initial hedge
of these transactions, they or their affiliates intend to enter into
various derivative transactions with respect to Stanley's common stock
and/or purchase shares of Stanley's common stock in secondary market
transactions concurrently with or shortly after the pricing of the Equity
Units. In addition, these counterparties or their affiliates have informed
Stanley that they are likely to modify their respective hedge positions
with respect to such transaction by entering into or unwinding various
derivative transactions with respect to Stanley's common stock and/or by
purchasing or selling Stanley's common stock in secondary market
transactions prior to the maturity of the convertible notes comprising part
of the Equity Units (and are likely to do so during any note observation
period related to a conversion of such convertible notes). Through the
convertible note hedge and warrant transactions the Stanley expects to
effectively increase the conversion premium on the convertible notes from
19% to 60%.
Stanley intends to use the net proceeds from the Equity Units offering
to repay $130 million outstanding under its revolving credit facility and
to pay the net cost of the convertible note hedge and warrant transactions
with any remaining balance used to reduce its outstanding borrowings under
its extendible commercial notes and commercial paper programs. The bridge
facility, put in place in January 2007 for temporary financing of Stanley's
acquisition of HSM Protection Services, Inc., will, as previously
disclosed, be terminated upon closing of these transactions. Stanley
intends to use the net proceeds of the notes offering to reduce its
outstanding borrowings under its extendible commercial notes and commercial
paper programs.
Goldman, Sachs & Co. and UBS Investment Bank are acting as joint
book-running managers of the notes offering. Citigroup Global Markets Inc.,
Morgan Stanley & Co. and Bank of America Securities LLC are acting as joint
book-running managers of the Equity Units offering.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy nor shall there be any sales of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such state. The offerings of each of the notes and the Equity Units
will be made only by means of a prospectus and a related prospectus
supplement.
Copies of the final prospectus for the offerings may be obtained from:
Citigroup Global Markets, Inc. Morgan Stanley & Co. Incorporated
Brooklyn Army Terminal Attention Prospectus Department
140 58th St., 8th Floor 180 Varick Street
Brooklyn, New York 11220 New York, New York 10014
Telephone: (718) 765-6732
Facsimile: (718) 7656734
The Stanley Works is a worldwide supplier of consumer products,
industrial tools and security solutions for professional, industrial and
consumer use.
This press release contains statements that constitute "forward-looking
statements", including with regard to Stanley's planned securities
offerings the anticipated use of the net proceeds and the expected results
of the convertible note hedge and warrant transactions. These statements
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Because such statements inherently involve
risks and uncertainties, actual future results may differ materially from
those expressed or implied by such forward-looking statements. No assurance
can be given that the offerings will be consummated on the terms described
above or at all. Consummation of the offerings and the terms thereof are
subject to numerous conditions, many of which are beyond the control of
Stanley, including: the prevailing conditions in the public capital
markets; interest rates; economic, political and market factors affecting
trading volumes; securities prices or demand for Stanley's stock; and other
factors, including those set forth in the "Risk Factors" section of
Stanley's annual report on Form 10-K. The Company undertakes no obligation
to update these statements for revisions or changes after the date of this
release.
SOURCE The Stanley Works
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Related links:
http://www.StanleyWorks.com
http://www.prnewswire.com/comp/874363.html/
CONTACT:
Gerry Gould, V.P. - Investor Relations, The
Stanley Works, +1- 860-827-3833, ggould@stanleyworks.com
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