Milwaukee-based Rexnord Corp. hopes to raise $339.1 million through an offering of depository shares and plans to use roughly half of the money to pay down debt.
The remainder of the money will be used for general corporate purposes, potentially including capital expenditures, research and development or financing acquisitions and investments.
The company is offering 7 million depository shares, each of which represents a 1/20th interest in a share of Rexnord’s 5.75 percent Series A Mandatory Convertible Preferred Stock.
The offering is being made at $50 per depository share and is expected to close Dec. 7.
Each share of the mandatory convertible preferred stock will automatically convert to between roughly 39.7 and 47.6 shares of Rexnord’s common stock on Nov. 15, 2019.
Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Barclays Capital Inc. and Citigroup Global Markets Inc. are acting as joint book-running managers of the offering.
Rexnord has a credit agreement with Credit Suisse AG that allows for a $1.95 billion term loan and $265 million in revolving credit. The company had borrowed $1.78 billion under the term loan as of Sept. 30. According to SEC filings, the company plans to use $169.6 million from the offering to pay down some of the term loan debt.