Atlas Air plans $200 million seven-year convertibles to yield 2.25%-2.75%, up 27.5%-32.5%

By Rebecca Melvin

New York, May 27 – Atlas Air Worldwide Holdings Inc. plans to price $200 million of seven-year convertible notes after the market close on Thursday that were talked to yield 2.25% to 2.75% with an initial conversion premium of 27.5% to 32.5%, according to market sources.

The registered deal has a $30 million greenshoe and was being sold via Morgan Stanley & Co. International and BNP Paribas as joint bookrunners with Credit Agricole as a joint lead manager.

BB&T, FBR Capital Markets, Sidoti & Co. and Stephens are co-managers.

The notes are non-callable for life with no puts. There is full dividend protection in the form of a conversion ratio adjustment.

In connection with the pricing of the notes, Atlas Air plans to enter into convertible note hedge and warrant transactions, or a call spread.

Proceeds are intended primarily to refinance certain equipment notes funded by Enhanced Equipment Trust Certificates related to five Boeing 747-400 freighter aircraft. In addition, the company plans to use a portion of proceeds to fund the net cost of the call spread, and for working capital and capital expenditures, repayment or refinancing of debt and for general corporate purposes.

Purchase, N.Y.-based Atlas Air provides outsourced aircraft and aviation operating services.

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