UAL to price $175 million 20-year convertibles to yield 6.75%-7.25%, up 15%-20%

By Rebecca Melvin

New York, Sept. 30 - UAL Corp. plans to price $175 million of 20-year convertibles after the close of markets Thursday, which were talked to yield 6.75% to 7.25% with an initial conversion premium of 15% to 20%, according to a release.

The bond issue has an over-allotment option for an additional $26.25 million in notes.

The holding company, whose primary subsidiary is United Air Lines Inc., also plans to price 19 million shares of common stock.

J.P. Morgan Securities Inc., Morgan Stanley & Co. Inc. and Goldman, Sachs & Co. will act as joint bookrunners of both offerings.

Neither offering will be contingent on the completion of the other. The company intends to use the net proceeds from both offerings for general corporate purposes.

Chicago-based UAL is the holding company for carrier United Air Lines.

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