New Issue: DST $700 million convertible at 40% premium; A yields 4.125%, B yields 3.625%

By Ronda Fears

Nashville, Aug. 7 - DST Systems Inc. sold $700 of 20-year cash-to-zero convertible notes in two parts at the wide end of revised price talk via joint bookrunners Citigroup and Banc of America Securities.

Series A sold at par to yield 4.125% with a 40% initial conversion premium. Talk was revised to a yield of 3.625% to 4.125% with a 40% to 45% initial conversion premium from the original 3.375% to 3.875%, up 43-48%.

Series B sold at par to yield 3.625% with a 40% initial conversion premium. Talk was revised to a yield of 3.125% to 3.625% with a 40% to 45% initial conversion premium from the original 2.875% to 3.375%, up 43% to 48%.

Holders will have dividend protection by way of a conversion ratio adjustment for distributions greater than $0.0025 per share per quarter.

DST is a Kansas City, Mo. provider of information processing and software services.

Terms of the new deal are:

Issuer: DST Systems Inc.

Issue:	Series A convertible senior notes
Lead managers:		Citigroup and Banc of America Securities
Amount	$450 million
Greenshoe:	$90 million
Maturity:	Aug. 15, 2033
Coupon:	4.125% for 7 years, then 0%
Price:	Par
Yield to maturity:	4.125%
Conversion premium:	40%
Conversion price:	$49.084
Conversion ratio:	20.3732
Call:	Non-callable for 7 years
Put:	In years 7, 12 and 17
Contingent conversion:	120%
Contingent payment:	120%
Price talk:	Revised: 3.625-4.125%, up 40-45%
	Original: 3.375% to 3.875%, up 43-48%
Pricing date:	Aug. 6, after the close
Settlement:	Aug. 12
Distribution:	Rule 144A
Issuer:	DST Systems Inc.
Issue:	Series B convertible senior notes
Lead managers:		Citigroup and Banc of America Securities
Amount	$250 million
Greenshoe:	$50 million
Maturity:	Aug. 15, 2033
Coupon:	3.625% for 5 years, then 0%
Price:	Par
Yield to maturity:	3.625%
Conversion premium:	40%
Conversion price:	$49.084
Conversion ratio:	20.3732
Call:	Non-callable for 5 years
Put:	In years 5, 10 and 15
Contingent conversion:	120%
Contingent payment:	120%
Price talk:	Revised: 3.125-3.625%, up 40-45%
	Original: 2.875-3.375%, up 43-48%
Pricing date:	Aug. 6, after the close
Settlement:	Aug. 12
Distribution:	Rule 144A

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