ADC Telecommunications launches $400 million convertible subordinated notes in two tranches

By Evan Weinberger

New York, Dec. 18 - ADC Telecommunications Inc. launched $400 million in convertible subordinated notes in two tranches Tuesday.

The first tranche, due July 15, 2015, is talked at a 3.25% to 3.75% coupon and a 70% to 75% initial conversion premium. There are embedded warrants on 70% to 75% of the underlying shares of the first tranche.

The second tranche, due July 15, 2017, is talked at a 3.25% to 3.75% coupon and an 80% to 85% initial conversion premium. There are embedded warrants on 80% to 85% of the underlying shares of the second tranche.

Credit Suisse and Morgan Stanley are the bookrunners of the Securities and Exchange Commission registered transaction.

Each tranche comes with a $25 million greenshoe.

The convertibles are set to price Wednesday after the market close.

The convertibles have no calls or puts. They do carry fundamental change protections.

ADC is a Minneapolis-based telecommunications firm. The company plans to use $200 million of the proceeds to repurchase, prior to maturity, or repay outstanding issues of its 1% convertible subordinated notes due 2008. Any proceeds not used for the repurchase of the subordinated notes due 2008 will be used for general corporate purposes and strategic opportunities. After June 23, ADC may also any remaining proceeds to repurchase, prior to maturity, or repay all or a portion of its outstanding $200 million in floating-rate convertible subordinated notes due 2013.

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