Affiliated Managers Group proposes $300 million of 30-year convertible preferreds at 5.1%, up 48%

By Kenneth Lim

Boston, March 28 - Affiliated Managers Group Inc. plans to offer $300 million of 30-year convertible preferreds with a dividend of 5.1% and an initial conversion premium of 48%.

The securities will be offered through AMG unit AMG Capital Trust I, but will be guaranteed by the parent. The price of each preferred is expected to be set on Wednesday morning before the market opens.

Goldman Sachs & Co., Bank of America Securities and Merrill Lynch & Co. are the bookrunners for the overnight Rule 144A deal.

The convertibles may be converted into AMG stock a $150 per common share. The stock closed at $101.45 on Tuesday.

The preferreds are non-callable for the first five years, and may only be called at 130% of the conversion price after that.

The conversion ratios will be adjusted if AMG pays any dividends. Takeover protection is in the form of a premium make-whole adjustment.

AMG, a Prides Crossing, Mass.-based fund manager, plans to use the proceeds from the deal to buy back about 1.3 million shares and for general corporate purposes, which could include more share buybacks.

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