Colony Financial to price $200 million seven-year convertibles to yield 3.625%-4.125%, up 10%-15%

By Rebecca Melvin

New York, Jan. 22 - Colony Financial Inc. launched $200 million of seven-year convertible senior notes that were seen pricing before the market open Thursday and were talked to yield 3.625% to 4.125% with an initial conversion premium of 10% to 15%, according to a syndicate source.

There is a $30 million greenshoe for the registered, off-the-shelf deal that was being sold via Morgan Stanley & Co. LLC, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc.

The bonds are non-callable for five years and then are provisionally callable if shares exceed 130% of the conversion price.

Proceeds will be used to repay amounts outstanding under the company's secured revolving credit facility, with remaining proceeds intended to acquire target assets and for working capital and general corporate purposes.

Santa Monica, Calif.-based Colony Financial is a real estate investment trust.

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