Albany International to offer $150 million of 20-year convertibles, talked at 1.75%-2.25%, up 20%-25%

By Kenneth Lim

Boston, March 7 - Albany International Corp. plans to offer $150 million of 20-year convertible notes that are talked to yield between 1.75% and 2.25% with an initial conversion premium between 20% and 25%, market sources said.

The securities will mature on March 1, 2026 and will be priced at par.

Final pricing is expected after the bell on Tuesday, March 7.

Bookrunners JP Morgan and Banc of America Securities have a 13-day greenshoe option for $30 million.

The deal will be distributed under Rule 144A.

The convertibles will be non-callable for seven years, with puts in years seven and 15. They also have takeover and dividend protection.

A contingent conversion feature kicks in when the value of the bond exceeds parity of 103.

Albany, N.Y.-based Albany International will use proceeds from the offering to repurchase the rest of the 3.5 million of its class A common stock is has not already bought. The company, which announced the share buyback in January, has already repurchased 663,700 shares.

The company will also enter into convertible note hedge and warrant transactions that will give it the option to buy shares and reduce the potential dilution from the conversion of the notes.

Albany International makes consumable parts for paper-making machines and industrial doors.

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