General |
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Issuer:
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Brookdale Senior Living Inc., a Delaware corporation (Brookdale). | |
Ticker/Exchange:
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BKD / New York Stock Exchange. | |
Last Reported Sale Price of Common Stock on June 8, 2011: |
$23.00 per share. |
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Notes Offering |
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Title of Securities:
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2.75% Convertible Senior Notes due 2018. | |
Aggregate Principal Amount Offered: |
$275,000,000 aggregate principal amount of notes (or a total of $316,250,000 if the underwriters over-allotment option to purchase up to $41,250,000 of additional aggregate principal amount of notes is exercised in full). |
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Price to Public:
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100% of principal amount, plus accrued interest from June 14, 2011, if settlement occurs after that date; $275,000,000 total. | |
Underwriting Discounts and
Commissions: |
2.50% of principal amount; $6,875,000 (excluding the underwriters over-allotment option) total. |
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Proceeds, After Expenses,
to Brookdale: |
Brookdale expects to receive approximately $267.8 million (or approximately $308.1 million if the underwriters exercise their overallotment option in full) of proceeds from the notes offering after deducting discounts and commissions payable to the underwriters and deducting expenses payable by Brookdale related to the notes offering. |
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Concessions:
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The underwriters may offer notes to dealers at a price that represents a concession not in excess of 1.35% of the principal amount of the notes. | |
Expenses:
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Brookdale estimates that its share of the total expenses for the notes offering, excluding underwriting discounts and commissions, will be approximately $354,000. The underwriters have agreed to reimburse certain of Brookdales expenses in connection with this offering. | |
Stated Maturity:
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June 15, 2018, subject to earlier repurchase or conversion. | |
Interest Rate:
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2.75% per annum. |
Interest Payment Dates:
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Interest will accrue from June 14, 2011, and will be payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2011, to holders of record at the close of business on the preceding June 1 and December 1, respectively. | |
Day Count Convention:
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30/360. | |
Initial Conversion Rate:
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34.1006 shares of common stock per $1,000 aggregate principal amount of notes. | |
Initial Conversion Price:
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Approximately $29.325 per share of common stock. | |
Convertibility Trigger
Price under the Market Price Condition: |
Approximately $38.12, which is 130% of the Initial Conversion Price. |
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CUSIP Number:
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112463 AA2. | |
ISIN Number:
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US112463AA27. | |
Convertible Note Hedge and Warrant Transactions: |
In connection with the offering of the notes, Brookdale has entered into convertible note hedge transactions (the convertible note hedge transactions) with certain financial institutions affiliated with the underwriters (the hedge counterparties). The convertible note hedge transactions cover, subject to customary anti-dilution adjustments, 9,377,665 shares of Brookdales common stock. Brookdale also has entered into warrant transactions (the warrant transactions) with the hedge counterparties. The warrants issued to the hedge counterparties cover, subject to customary anti-dilution adjustments, 9,377,665 shares of Brookdales common stock. The cost to Brookdale of the convertible note hedge transactions, taking into account the proceeds to Brookdale of the warrant transactions, was approximately $27.8 million. If the underwriters exercise their over-allotment option to purchase additional notes, Brookdale expects to increase the number of shares underlying the convertible note hedge transactions and the warrant transactions, in each case on a pro rata basis. |
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Joint Book-Running Managers:
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Merrill Lynch, Pierce, Fenner & Smith Incorporated | |
J.P. Morgan Securities LLC | ||
RBC Capital Markets, LLC | ||
Co-Managers:
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CSCA Capital Advisors, LLC Stifel, Nicolaus & Company, Incorporated |
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Adjustment to Conversion Rate upon a Make Whole Fundamental Change: |
The following table sets forth the numbers of additional shares of Brookdale common stock to be added to the conversion rate for each $1,000 principal amount of notes upon conversion in connection with a make whole fundamental change based upon hypothetical stock prices and effective dates. |
Stock Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Date | $23.00 | $25.00 | $27.50 | $29.33 | $32.50 | $35.00 | $40.00 | $45.00 | $50.00 | $60.00 | $75.00 | $90.00 | $105.00 | $120.00 | ||||||||||||||||||||||||||||||||||||||||||
June 14, 2011 |
9.3776 | 8.2049 | 6.8930 | 6.1417 | 5.1347 | 4.5292 | 3.6421 | 3.0294 | 2.5819 | 1.9870 | 1.4445 | 1.0984 | 0.8567 | 0.6787 | ||||||||||||||||||||||||||||||||||||||||||
June 15, 2012 |
9.3776 | 8.1254 | 6.7169 | 5.9197 | 4.8693 | 4.2490 | 3.3628 | 2.7688 | 2.3451 | 1.7914 | 1.3020 | 0.9926 | 0.7769 | 0.6174 | ||||||||||||||||||||||||||||||||||||||||||
June 15, 2013 |
9.3776 | 8.0444 | 6.5131 | 5.6587 | 4.5515 | 3.9133 | 3.0281 | 2.4573 | 2.0632 | 1.5651 | 1.1385 | 0.8703 | 0.6838 | 0.5455 | ||||||||||||||||||||||||||||||||||||||||||
June 15, 2014 |
9.3776 | 7.9071 | 6.2296 | 5.3093 | 4.1420 | 3.4888 | 2.6167 | 2.0828 | 1.7299 | 1.3059 | 0.9513 | 0.7304 | 0.5760 | 0.4612 | ||||||||||||||||||||||||||||||||||||||||||
June 15, 2015 |
9.3776 | 7.6443 | 5.8012 | 4.8098 | 3.5886 | 2.9318 | 2.1022 | 1.6318 | 1.3390 | 1.0123 | 0.7415 | 0.5722 | 0.4530 | 0.3638 | ||||||||||||||||||||||||||||||||||||||||||
June 15, 2016 |
9.3776 | 7.1808 | 5.1398 | 4.0742 | 2.8198 | 2.1889 | 1.4633 | 1.1016 | 0.9034 | 0.6906 | 0.5118 | 0.3971 | 0.3154 | 0.2541 | ||||||||||||||||||||||||||||||||||||||||||
June 15, 2017 |
9.3776 | 6.3459 | 4.0355 | 2.8963 | 1.6850 | 1.1673 | 0.6947 | 0.5258 | 0.4469 | 0.3532 | 0.2649 | 0.2062 | 0.1642 | 0.1326 | ||||||||||||||||||||||||||||||||||||||||||
June 15, 2018 |
9.3776 | 5.8994 | 2.2630 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
| if the stock price is between two stock prices in the table or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates, based on a 365-day year, as applicable; |
| if the stock price is greater than $120.00 per share (subject to adjustment), no additional shares will be added to the conversion rate; and |
| if the stock price is less than $23.00 per share (subject to adjustment), no additional shares will be added to the conversion rate. |
Trade Date:
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June 8, 2011. | |
Settlement Date:
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June 14, 2011. |
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| the net proceeds of approximately $267.8 million from the issuance of notes, after deducting the discounts, commissions and estimated expenses payable by Brookdale; |
| the use of approximately $27.8 million to fund the net costs of the convertible note hedge and warrant transactions; and |
| the use of approximately $240.0 million to repay a portion of Brookdales outstanding mortgage debt following the completion of the offering. |
As of March 31, 2011 | ||||||||
Actual | As Adjusted | |||||||
(in thousands) | ||||||||
Cash
and cash
equivalents |
$ | 36,732 | $ | 36,732 | ||||
Other
assets, net (deferred financing costs) |
$ | 95,776 | $ | 101,357 | ||||
Total debt
(current and
long-term) |
$ | 2,464,287 | 2,436,584 | |||||
Stockholders equity: |
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Common Stock, $0.01 par value; 200,000,000
shares authorized, actual and as adjusted: 125,670,330 shares issued and 124,459,029 shares outstanding, actual and as adjusted |
$ | 1,244 | 1,244 | |||||
Preferred Stock, $0.01 par value; 50,000,000
shares authorized; actual and as adjusted; no
shares issued and outstanding, actual and as
adjusted |
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Additional
paid-in
capital |
$ | 1,908,926 | $ | 1,942,210 | ||||
Treasury
stock, at cost |
$ | (29,187 | ) | $ | (29,187 | ) | ||
Accumulated
deficit |
$ | (828,181 | ) | $ | (828,181 | ) | ||
Accumulated
other comprehensive loss |
$ | (43 | ) | $ | (43 | ) | ||
Total
stockholders equity |
$ | 1,052,759 | 1,086,043 | |||||
Total
liabilities and stockholders
equity |
$ | 4,431,268 | $ | 4,436,849 | ||||
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