Gaylord sets out to raise up to $380M

Combo stock/convertible debt offering to help push out debt maturities

Email | Print By Geert De Lombaerde

Gaylord Entertainment officials on Tuesday evening said they plan to raise at least $325 million via both a stock sale and a private debt placement.

The largest part of the Nashville-based company's capital raise is a convertible senior debt issuance of at least $200 million. Buyers will have the option to buy another $40 million of the notes, which will come due in 2014.

Gaylord said it will negotiate the terms of the debt with buyers. Officials also plan to enter into various hedge and warrant deals – the former to limit the potential dilutory effect of a conversion, the latter to raise more cash.

Alongside the debt sale, Gaylord also plans to market up to 5.75 million common shares via Deutsche Bank Securities Inc., BofA Merrill Lynch, Citi and Wells Fargo Securities.

Gaylord filed a shelf registration in May that allows it to raise up to $750 million in a variety of ways. At the time, officials said proceeds could go toward expansion projects – most notably its plans for a massive resort in Arizona – as well as debt reduction.

Primarily the latter will be addressed by this new offering: The cash raised will pay off $260 million of 8 percent debt due in 2013. For the terms of that buyback, click here.

That Gaylord can consider a stock sale of any kind is testament to the steep rise in its share price since the market's March lows. Over the past six months, Gaylord (Ticker: GET) has more than tripled and outperformed the S&P 500 by 200 percentage points.

The stock now trades roughly where it did before Texas billionaire Robert Rowling went on a buying spree in the summer of 2008. Rowling, along with longtime Gaylord investor Mario Gabelli, has since negotiated a Gaylord board seat for himself.