BUZZ-H2O America stock falls due to $325 million convertible issuance

October 30 - ** The stock price of water supply company H2O America (HTO.O) fell 0.5% to $58.30 in pre-market trading on Friday after the company completed a financing round

** San Jose, California-based HTO announced the pricing (link) late Thursday, offering 6.5 million equity units at $50 per unit, raising $325 million

** The 3-year mandatory convertible units have an annual dividend yield of 7.75%; the trigger price of $68.82 represents a premium of 17.5% over the previous trading day’s closing price (i.e., the reference price)

** On Thursday, HTO shares fell 5.2% to $58.57 after the company (link) launched this offering, with proceeds to be used for general purposes, including acquisitions, capital expenditure, or debt repayment

** Wells Fargo and JPMorgan serve as joint bookrunners

** The company provides water supply and wastewater treatment services in California, Connecticut, Maine, and Texas, with a market capitalization of approximately $2.8 billion

** As of Thursday, the stock had gained about 20% year-to-date

** According to LSEG data, 5 out of 7 analysts rate the stock as “strong buy” or “buy”, and 2 rate it as “hold”; the median target price is $65

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