Amdocs $450 million overnight convertible talked at 0.5%, up 54-58%

By Ronda Fears

Nashville, March 1 - Amdocs Ltd. launched an overnight $450 million of 20-year convertible notes talked to yield 0.5% with a 54% to 58% initial conversion premium with $180 million of proceeds earmarked to buy stock sold short by note buyers.

Morgan Stanley Inc. is bookrunner of the Rule 144A deal. Co-managers are Goldman Sachs & Co. and Merrill Lynch & Co.

The senior notes will be non-callable for five years with puts in years five, 10 and 15. There is a 130% contingent conversion trigger.

There is a $67.5 million greenshoe available.

The issue is expected to be rated Baa3 by Moody's and BBB- by Standard & Poor's.

Chesterfield, Mo.-based Amdocs, which provides billing software for telephone companies among other products, said that, after buying stock on swap, it would use proceeds for general corporate purposes, which might include acquisitions.

Also, the company said it may use some of the proceeds, along with other cash, to repurchase its 2% convertible due 2008, a $400 million issue that is putable June 1 at par. Due to the conversion price, the company said the put would likely be exercised. There is $395.5 million outstanding, the company said.

Early last week, an Israel newspaper reported that Amdocs had a $500 million convertible deal in the works with proceeds going to roll over the existing convertible.

"There's strictly no basis for that story," Amdocs spokesman Jim Monohan told Prospect News on Thursday. "We don't have any plans."

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