Quanta Services plans $125 million of 20-year convertibles at 3.75%, up 35%; reoffer price talked at 98.25

By Kenneth Lim

Boston, April 26 - Quanta Services Inc. on Wednesday announced a sale of $125 million of 20-year 3.75% convertible subordinated notes with an initial conversion premium of 35% talked to be reoffered at 98.25% of par.

There is also a greenshoe option for a further $18.75 million.

The offer price will be finalized on Thursday before the market opens, syndicate sources confirmed. Quanta Services stock closed at $16.60, down 12 cents or 0.72%, on Wednesday before the deal was announced.

Credit Suisse, Bank of America and JP Morgan are the bookrunners of the overnight Rule 144A deal.

The convertibles will be non-callable for the first four years, and there are puts in years seven, 10 and 15.

The notes will have full dividend protection, and takeover protection is in the form of a change of control put with a premium make-whole feature.

The notes may be converted if Quanta Services stock exceeds 130% of the conversion price.

Houston-based Quanta Services will use the deal proceeds, together with existing cash, to tender for its $172.5 million of 4% convertible subordinated notes due 2007. Quanta Services provides specialty network contracting services to the electric power, gas, telecommunications and cable television industries.

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