New Issue: Charles River Labs upsized $175 million convertibles at 3.5%, up 30%

By Ronda Fears

Nashville, Tenn., Jan. 17 - Charles River Laboratories International Inc. sold $175 million of 20-year convertible senior debentures at par to yield 3.5% with a 30% initial conversion premium after the market close Thursday.

Credit Suisse First Boston was lead manager of the Rule 144A deal, which priced at the rich end of yield talk and more aggressive than premium guidance and was upsized form $150 million. Price talk had put the yield between 3.5% and 4.0% and the premium in a range of 24% to 28%.

Wilmington, Mass.-based Charles River Labs, which provides research tools and lab animals for drug discovery and research, said proceeds would be used to retire the $79.7 million aggregate principal amount of 13.5% senior subordinated notes due 2009 of its wholly-owned subsidiary Charles River Laboratories Inc., through a tender offer, and for general corporate purposes.

Charles River Labs shares closed Thursday up 10c to $29.90.

Terms of the new deal are:

Issuer: Charles River Laboratories International Inc.

Amount: $175 million

Greenshoe: $25 million

Lead Manager: Credit Suisse First Boston

Maturity Date: Feb. 1, 2022

Dividend: 3.5%

Issue Price: par

Yield: 3.5%

Conversion Premium: 30%

Conversion Price: $38.87

Conversion Ratio: 25.7268

Call: non-callable for three years

Put: in years six, 11 and 15

Rating(s): S&P: B+

Settlement Date: Jan. 24

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