AGCO prices $175 million convertibles to yield 1.25%, up 30%

New York, Nov. 28 - AGCO Corp. priced $175 million of convertible senior subordinated notes due 2036 to yield 1.25% with a 30% initial conversion premium.

The deal came within talk, which put the coupon at 1.125% to 1.625% and the initial conversion premium at 27.5% to 32.5%.

The conversion ratio is 24.5525 and the conversion price $40.73.

There is an over-allotment option for a further $26.25 million.

Morgan Stanley and Goldman Sachs are the bookrunners of the registered off-the-shelf offering. Rabo Securities USA, Inc. and Lazard Capital Markets LLC are co-managers.

The convertibles will be non-callable for the first seven years and may be put in years seven, 10, 15, 20 and 25.

The notes will have a contingent conversion hurdle at 120% of the conversion price.

There will be dividend and takeover protection.

AGCO, a Duluth, Ga.-based agricultural equipment maker, said the proceeds of the deal will be used to pay part of its outstanding Libor plus 175 basis point bank loans due June 2009.

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