U.S. Steel to price $300 million seven-year convertible notes with 4%-4.5% coupon, up 27.5%-32.5%

By Rebecca Melvin

New York, Oct. 15 – United States Steel Corp. plans to price $300 million of seven-year convertibles after the market close on Wednesday with a coupon of 4% to 4.5% and an initial conversion premium of 27.5% to 32.5%, according to market sources.

The Rule 144A offering has a $50 million greenshoe.

The securities are non-callable for four years and then are provisionally callable in years five and six if the stock price exceeds 130% of the conversion price. There are no puts.

The convertibles have full dividend protection in the form of a conversion rate adjustment for any dividend above $0.05 per share per quarter. There is also takeover protection.

Proceeds will be for general corporate purposes, including strategic investments.

U.S. Steel is an integrated steel producer based in Pittsburgh.

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