NEW YORK, March 13, 2013 /PRNewswire/ -- Iconix Brand Group, Inc. (NASDAQ: ICON) ("Iconix") announced today the pricing of its private offering of $350 million aggregate principal amount of 1.50% Convertible Senior Subordinated Notes due 2018 (the "notes"), which was upsized from the previously announced $325 million offering, to be sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). Iconix has granted the initial purchaser of the notes a 30-day option to purchase up to an additional $50 million aggregate principal amount of notes, solely to cover over-allotments, if any. The offering is expected to close on March 18, 2013, subject to customary closing conditions.
The notes will be Iconix's unsecured obligations, subordinated in right of payment to any future secured senior indebtedness and structurally subordinated to all existing and future indebtedness of Iconix's subsidiaries. The notes will pay interest semi-annually in cash on March 15 and September 15 at a rate of 1.50% per year, commencing September 15, 2013. The notes will mature on March 15, 2018.
Iconix estimates that the net proceeds from the offering of the notes will be approximately $342.0 million (or approximately $391.0 million if the initial purchaser exercises its over-allotment option in full), after deducting the initial purchaser's discount and estimated offering expenses. In addition, Iconix expects to receive proceeds from the sale of the warrants described below. Iconix expects to use the net proceeds from the offering of the notes (i) to fund the repurchase of approximately 2.96 million shares of its common stock for approximately $69 million in privately negotiated transactions through the initial purchaser conducted contemporaneously with the pricing of the notes, (ii) to fund the net cost of a convertible note hedge transaction and a warrant transaction with a hedge counterparty, as described below, and (iii) for general corporate purposes, which may include investing in or acquiring new brands through opportunistic transactions and strategic relationships and additional share repurchases. Since January 1, 2013, Iconix has repurchased approximately 2.6 million shares of its common stock for an aggregate purchase price of approximately $62.0 million (which excludes the 2.96 million shares repurchased for $69 million as mentioned above).
The holders of the notes will have the ability to require Iconix to repurchase all or any portion of their notes for cash in the event of a fundamental change. In such case, the repurchase price would be 100% of the principal amount of the notes being repurchased plus any accrued and unpaid interest.
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