Issuer Free Writing Prospectus
Filed by: Avatar Holdings Inc.
Pursuant to Rule 433 under the Securities Act of 1933
Registration Statement on Form S-3: No. 333-161498
Avatar Holdings Inc.
7.50% Senior Convertible Notes due 2016
February 1, 2011
|
|
|
Issuer: |
|
Avatar Holdings Inc. (Nasdaq: AVTR) |
|
|
|
Title of securities: |
|
7.50% Senior Convertible Notes due 2016 (Notes) |
|
|
|
Issue price: |
|
100% of each Notes principal amount, plus accrued interest, if any, from
February 4, 2011 |
|
|
|
Note denominations: |
|
$1,000 |
|
|
|
Aggregate principal amount offered: |
|
$100,000,000 |
|
|
|
Underwriting discount: |
|
4.25% |
|
|
|
Net proceeds: |
|
$95,750,000 |
|
|
|
Maturity: |
|
February 15, 2016, unless earlier converted, repurchased or redeemed |
|
|
|
Annual interest rate: |
|
7.50% per annum |
|
|
|
Interest payment dates: |
|
Payable semi-annually in arrears in cash on February 15 and August 15 of each year, beginning on August 15, 2011 |
|
|
|
Conversion price: |
|
$30.00 per share of common stock (subject to adjustment as described under Adjustment to Conversion Rate Upon a Non-Stock
Change of Control) |
|
|
|
Conversion rate: |
|
33.3333 shares of common stock per $1,000 aggregate principal amount of Notes (subject to adjustment as described under
Adjustment to Conversion Rate Upon a Non-Stock Change of Control) |
|
|
|
Conversion premium: |
|
50.23% (based on the last reported sales price of $19.97 for Avatars common stock on January 31, 2011) |
|
|
|
Certain covenants: |
|
The indenture governing the Notes will contain the following financial covenants: |
|
|
|
Until February 15, 2014, Avatar will maintain, at all times, cash and cash equivalents of not less than $20 million; |
|
|
|
|
Until the second anniversary of the original issuance date of the Notes, Avatars total consolidated indebtedness (as
indebtedness is defined in the Notes) shall not exceed $150 million at any time, excluding, until April 5, 2011, Avatars
outstanding 4.50% convertible notes due 2024; and |
|
|
|
|
Until the second anniversary of the original issuance date of the Notes, Avatars total consolidated indebtedness (as
indebtedness is defined in the Notes ) shall not exceed $50 million at any time, excluding for purposes of this clause: (a)
the Notes, (b) any indebtedness with a maturity date after February 15, 2014, which indebtedness does not provide the holder
with a unilateral put right prior to February 15, 2014 and (c) until April 5, 2011, Avatars outstanding 4.50% convertible
senior notes due 2024. |
The exact stock price and effective dates may not be set forth on the table, in which case, if the
stock price is:
|
|
|
between two stock price amounts on the table or the effective date is between two
dates on the table, the number of additional shares will be determined by straight-line
interpolation between the number of additional shares set forth for the higher and lower
stock price amounts and the two dates, as applicable, based on a 360-day year; |
|
|
|
|
in excess of $70.00 per share (subject to adjustment), no additional shares will be
issued upon conversion; |
|
|
|
|
less than $19.97 per share (subject to adjustment), no additional shares will be
issued upon conversion. |
Notwithstanding the foregoing, in no event will the total number of shares issuable upon conversion
exceed 50.0751 per $1,000 principal amount of the Notes, subject to adjustments in the same manner
as the conversion rate.
* * * * *
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer
participating in the offering will arrange to send to you the prospectus if you request it by
calling toll-free 1-888-603-5847 or you may e-mail a request to Barclaysprospectus@broadridge.com
3