New Issue: Kellwood $180 million cash-to-zero convertibles yield 3.5%, up 30%

Nashville, June 16 - Kellwood Co. sold $180 million of 30-year cash-to-zero convertible notes at par for a yield to maturity of 3.5% and 30% initial conversion premium via sole bookrunner JPMorgan Securities Inc.

The Rule 144A deal sold at the cheaper end of yield talk for a 3.125% to 3.625% coupon and cheapest end of guidance for a 30% to 35% initial conversion premium.

Holders will have full dividend protection.

There was no cash takeover provision for holders, according to buyside sources.

St. Louis-based Kellwood, which makes apparel and fashion accessories, said proceeds would be used for general corporate purposes, including acquisitions, and to pay $4.7 million under its 6.9% notes due Sept. 1, 2005.

Terms of the deal are:

Issuer:	Kellwood Co.
Issue:	Convertible senior notes
Bookrunners:	JPMorgan Securities Inc.
Amount:	$180 million
Greenshoe:	$20 million
Maturity:	June 15, 2034
Coupon:	3.5%
Price:	Par
Yield:	3.5%
Conversion premium:	30%
Conversion price:	$53.35
Conversion ratio:	18.7434
Contingent conversion:	131.5%, adjusted from 130%
Dividend protection:	Yes
Takeover protection:	NA
Call:	Non-callable for 7 years
Put:	In years 7, 10, 15, 20, 25
Ratings:	S&P: BBB-
Price talk:	3.125-3.625%, up 30-35%
Pricing date:	June 16, after the close
Settlement date:	June 22
Distribution:	Rule 144A

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