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Vector Prices Offering Of Variable Interest Convertible Senior Notes

Stocks in this article: VGR

Vector Group Ltd. (NYSE: VGR) (“Vector” or the “Company”) today announced the pricing of its previously announced public offering of $200.0 million aggregate principal amount (or up to an aggregate of $230.0 million aggregate principal amount if the underwriter of such offering exercises its over-allotment option in full) of its Variable Interest Convertible Senior Notes due 2019 (the “Notes”) (the “Notes Offering”) in a registered public offering. The Company expects to close the Notes Offering on November 20, 2012, subject to satisfaction of customary closing conditions.

The Notes will be Vector’s senior unsecured obligations and will bear cash interest at a rate of 2.50% per year (the “Fixed Interest”), with an additional amount of interest based on the amount of cash dividends per share actually paid by the Company on its common stock during the prior three-month period ending on the record date for such interest payment multiplied by the total number of shares of the Company’s common stock into which the Notes are convertible on such record date (the “Dividend Interest” and, together with the fixed interest, the “Total Interest”). Notwithstanding the foregoing, however, the interest payable on each interest payment date shall be the higher of (a) the Total Interest and (b) 7.50% per year. Interest is payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, commencing on January 15, 2013. The Notes will mature on January 15, 2019, unless earlier repurchased, redeemed or converted in accordance with their terms. The Notes will be convertible at any time prior to the close of business on the business day immediately preceding the maturity date into shares of the Company’s common stock, par value $0.10 per share (the “Common Stock”), and cash in lieu of fractional shares of Common Stock. The initial conversion rate for the Notes will be 54.0541 shares of Common Stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $18.50 per share of Common Stock), subject to customary adjustments.

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