Alcatel-Lucent launches €550 million five-year convertible Oceanes to yield 4.25%-5%, up 30%-37%

By Rebecca Melvin

New York, June 26 - Alcatel-Lucent launched €550 million of five-year convertible bonds in the Oceane structure that were talked to yield 4.25% to 5%, with an initial conversion premium of 30% to 37% over its Euronext Paris-listed shares, according to a release.

There is an over-allotment option for up to an additional €80 million of bonds granted to the joint lead managers and joint bookrunners of the Regulation S offering.

Deutsche Bank is global coordinator for the offering and is a lead manager and bookrunner along with Crédit Agricole Corporate and Investment Bank and Morgan Stanley.

Proceeds will be used to repay debt including the company's old convertible bonds and reduce costs.

The bonds will be issued at par on July 3 and they will be mature on July 1, 2018. The bonds are callable at Alcatel's option under certain conditions.

Settlement will be June 26.

Standard & Poor's' lowered the ratings of Alcatel-Lucent and its subsidiary Alcatel-Lucent USA Inc. from B to B- with a stable outlook on June 21. Standard & Poor's affirmed the B short-term ranking of Alcatel-Lucent, and lowered the rating on the senior secured credit facilities issued by Alcatel-Lucent USA Inc. from BB- to B+, as well as the rating of the Alcatel-Lucent group long-term unsecured debt from CCC+ to CCC.

Alcatel-Lucent's long-term debt is rated Caa1 by Moody's with a negative outlook.

Paris-based Alcatel-Lucent provides solutions to deliver voice, data and video communication services to end-users.

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