Daily VWAP and Indicative Offer Consideration for
PHH Corporation’s Exchange Offer for its 6.00% Convertible Senior Notes due
2017
On May 6, 2015, PHH Corporation (“PHH”) commenced
an exchange offer (the “Offer”) for any and all of its outstanding 6.00% Convertible
Senior Notes due 2017 (the “Notes”), upon the terms and subject to the
conditions set forth in the offer to exchange, dated May 6, 2015 (the “Offer to
Exchange”), and in the related letter of transmittal (the “Letter of
Transmittal”). The Offer is scheduled to expire at 11:59 p.m., New York City
time (the “Expiration Time”), on Monday, June 15, 2015, unless extended or
earlier terminated by PHH (as may be extended by PHH, the “Expiration Date”).
Holders who validly tender Notes that are not validly
withdrawn and are accepted for exchange by PHH pursuant to the Offer will
receive, for each $1,000 principal amount of validly tendered and accepted
Notes, $1,125.00 in cash, plus accrued and unpaid interest from June 15, 2015
to, but excluding, the Settlement Date (as defined in the Offer to Exchange),
and a number of shares of PHH’s common stock, par value $0.01 per share (the
“Common Stock”), which is referred to in the Offer to Exchange as the “Exchange
Ratio” (together, the “Offer Consideration”), which number will be fixed by
4:30 p.m., New York City time, on the Expiration Date and will be equal to the
sum of the Daily Settlement Amounts for each VWAP Trading Day during the
Observation Period. The minimum consideration holders will receive per $1,000
principal amount of validly tendered and accepted Notes is $1,125.00 in cash
and 30.5824 shares of Common Stock. The maximum number of shares of Common
Stock that may be issued as consideration in the Offer is 42.4871 per $1,000
principal amount of validly tendered and accepted Notes. If the Exchange Ratio
will equal 42.4871, the maximum number of shares of Common Stock that may be
issued per $1,000 principal amount of Notes as part of the Offer Consideration,
then the Offer will be automatically extended until 11:59 p.m., New York City
time, on the second trading day following the originally scheduled Expiration
Date to permit holders of Notes to tender or withdraw their Notes during those
days.
The “Daily Settlement Amount” means, for any VWAP
Trading Day:
· 1/25 multiplied by
· (i) 78.2014 shares of PHH’s Common Stock multiplied
by the Daily VWAP for such VWAP Trading Day, minus (ii) 1,000, divided by
· the Daily VWAP for such VWAP Trading Day.
The “Daily VWAP” means, for any VWAP Trading Day,
the per share volume-weighted average price as displayed under the heading
“Bloomberg VWAP” on Bloomberg page PHH US <equity> AQR (or any equivalent
successor page) in respect of the period from the scheduled open of trading on
the NYSE to the scheduled close of trading on the NYSE on such VWAP Trading Day
or, if such volume-weighted average price is unavailable, the market value of
one share of PHH’s Common Stock on such VWAP Trading Day using a
volume-weighted method as determined by a nationally recognized independent
investment banking firm retained for this purpose by PHH; provided that, in the
event that such price or market value is lower than $21.00, the Daily VWAP
shall be $21.00; and, provided further, that, in the event that such price or
market value is higher than $28.00, the Daily VWAP shall be $28.00. The Daily
VWAP will be determined without regard to after-hours trading or any other
trading outside of the regular trading session trading hours.
The “Observation Period” means the 25 consecutive
VWAP Trading Days beginning on the 24th VWAP Trading Day preceding
the Expiration Date and ending on the Expiration Date.
“VWAP Trading Day” means a day during which (i)
trading in PHH’s Common Stock generally occurs on the NYSE and (ii) there is no
“VWAP market disruption event” (as defined in the Offer to Exchange).
The table below indicates the Offer Consideration
with respect to each Note based on the formula for the Exchange Ratio described
above, based on the Daily Settlement Amounts on the VWAP Trading Days that have
passed since the commencement of the Offer:
|
VWAP Trading
Day |
Daily VWAP |
Cash(1) |
Daily
Settlement Amount |
Implied Share
Consideration (Exchange Ratio) per $1,000 of Notes (2) |
|
May 11, 2015 |
$27.2767 |
$1,125.00 |
1.6616 |
41.5401 |
|
May 12, 2015 |
$26.8165 |
|
1.6364 |
41.2255 |
|
May 13, 2015 |
$27.1304 |
|
1.6537 |
41.2645 |
|
May 14, 2015 |
$27.2182 |
|
1.6585 |
41.3137 |
|
May 15, 2015 |
$27.2894 |
|
1.6623 |
41.3624 |
|
May 18, 2015 |
$27.1733 |
|
1.6560 |
41.3687 |
|
May 19, 2015 |
$27.3384 |
|
1.6649 |
41.4050 |
|
May 20, 2015 |
$27.4973 |
|
1.6734 |
41.4587 |
|
May 21, 2015 |
$27.6509 |
|
1.6814 |
41.5228 |
|
May 22, 2015 |
$27.5253 |
|
1.6748 |
41.5577 |
|
May 26, 2015 |
$27.4446 |
|
1.6706 |
41.5765 |
|
May 27, 2015 |
$27.4583 |
|
1.6713 |
41.5936 |
|
May 28, 2015 |
$27.4738 |
|
1.6721 |
41.6098 |
|
May 29, 2015 |
$27.5434 |
|
1.6758 |
41.6301 |
|
June 1, 2015 |
$27.7231 |
|
1.6852 |
41.6635 |
|
June 2, 2015 |
$27.7413 |
|
1.6862 |
41.6942 |
|
June 3, 2015 |
$27.7591 |
|
1.6871 |
41.7226 |
|
June 4, 2015 |
$26.8588 |
|
1.6388 |
41.6807 |
|
June 5, 2015 |
$26.8571 |
|
1.6387 |
41.6432 |
|
June 8, 2015 |
$26.6151 |
|
1.6251 |
41.5925 |
|
June 9, 2015 |
$26.5025 |
|
1.6188 |
41.5390 |
|
June 10, 2015 |
$26.7186 |
|
1.6310 |
41.5042 |
|
June 11, 2015 |
$26.8509 |
|
1.6383 |
41.4805 |
|
June 12, 2015 |
$26.9918 |
|
1.6461 |
41.4669 |
|
June 15, 2015(3) |
$27.1156 |
|
1.6529 |
41.4611 |
___________________________________________________
(1) Cash
component of the Offer Consideration will also include accrued and unpaid
interest from June 15, 2015 to, but excluding, the Settlement Date.
(2) The
Implied Share Consideration is equal to the sum of the Daily Settlement Amounts
for each VWAP Trading Day that has passed in the Observation Period but with
the denominator “25” in the Daily Settlement Amount formula replaced by the
number of such VWAP Trading Days that have passed. Fractional shares of PHH’s
Common Stock will not be issued. Cash will be paid in lieu of fractional shares
based upon the Daily VWAP on the settlement date.
(3)
As of 4:00 p.m.
The last reported trading price of the Common Stock
on the New York Stock Exchange at 4:00 p.m. on June 15, 2015 was $27.14.
The final
Exchange Ratio is 41.4611 shares of PHH’s Common Stock per $1,000 principal
amount of validly tendered and accepted Notes. The Exchange Ratio was determined in accordance
with the formula described above and is equal to the sum of the Daily
Settlement Amounts for each VWAP Trading Day during the Observation Period, set
forth in the table above.
To tender Notes after 5:00 p.m., New York City
time, but on or prior to the Expiration Time, on the Expiration Date, DTC
participants may complete and sign a voluntary offering instructions form and
deliver it to the Exchange Agent in the manner set forth in the section of the
Offer to Exchange entitled “Description of the Offer.” The voluntary offering
instructions form can be found using the link below:
To withdraw Notes after 5:00 p.m., New York City
time, but on or prior to the Expiration Time, on the Expiration Date, DTC
participants should deliver to the Exchange Agent in accordance with the
procedures set forth in the section of the Offer to Exchange entitled
“Description of the Offer” a written notice of withdrawal specifying
information set forth in that section.
Citigroup Global Markets Inc. acts as PHH’s
exclusive financial advisor in connection with the Offer. Citigroup Global
Markets Inc. has not been retained to, and will not, solicit acceptances of the
Offer or make any recommendations with respect thereto. The exchange agent and
the information agent for the offer is Global Bondholder Services Corporation.
Holders of Notes may address questions about the Offer or make requests for
copies of the Offer to Exchange and related documents for free to Global Bondholder
Services Corporation, by calling (212) 430-3774.
None of PHH, PHH’s Board of Directors or executive
officers, the financial advisor, the exchange agent or the information agent or
any agent or other person makes any recommendation as to whether holders should
tender the Notes for exchange pursuant to the Offer. None of the Company, its
management or board of directors, the financial advisor, the information agent
or the exchange agent has authorized any person to give any information or to
make any representation in connection with the Offer other than the information
and representations contained in the Offer to Exchange or in the Letter of
Transmittal. If anyone makes any recommendation or representation or gives any
such information, you should not rely upon that recommendation, representation
or information as having been authorized by PHH, the financial advisor, the
information agent or the exchange agent.
This webpage shall not constitute an offer to
purchase, a solicitation of an offer to purchase, or a solicitation of an offer
to sell securities. The Offer may be made only pursuant to the terms and
conditions of the Offer to Exchange, the Letter of Transmittal and the other
related Offer materials. PHH will provide copies of the Offer materials upon
request free of charge to holders of the Notes.