Amerigroup prices upsized $240 million five-year convertible notes at 2.0%, up 32.5%

By Ronda Fears

Memphis, March 22 - Amerigroup Corp. priced an upsized $240 million of five-year convertible senior unsecured notes after the market closed Thursday with a coupon of 2% and an initial conversion premium of 32.5%.

The deal was increased from the $200 million size launched before the open Thursday and came within talk for a coupon of 1.5% to 2.0% and an initial conversion premium of 27.5% to 32.5%.

Holders can convert at a price of $32.10 per share, a ratio of 23.5114.

There is an over-allotment option for a further $20 million, unchanged from launch.

The issue is non-callable; there are no puts.

There is standard dividend and takeover protection.

There is a net-cash settlement feature.

Goldman Sachs is bookrunner of the Rule 144A offering.

Virginia Beach, Va.-based Amerigroup, which manages health care plans, said proceeds would be used to repay a portion of its new senior secured credit facility or other financing arrangements in order to post a bond in connection with the appeal of its Illinois litigation. Amerigroup said it also intends to use a portion of proceeds for hedge and warrant transactions concurrently with the pricing of the notes.

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