Alcatel-Lucent launches €1 billion of convertibles in two tranches

By Rebecca Melvin

New York, June 2 - Alcatel-Lucent plans to price €1 billion of convertible senior notes in two series under Regulation S, including €600 million of 5.5-year notes and €400 million of 6.5-year notes, according to a release.

The 5.5-year issue maturing Jan. 30, 2019 has an over-allotment option for €60 million of additional notes and was being talked at a 0% coupon with a 35% to 40% initial conversion premium

The 6.5-year issue maturing Jan. 30, 2020 has an over-allotment option for €40 million additional notes and was being talked at of 0% to 0.25% coupon and a 32% to 37% premium.

Final terms were expected late Monday. Proceeds are earmarked for partial or full reimbursement of the company's senior secured credit facility. If proceeds are insufficient to repay the entire facility, the remainder may be repaid with cash or by raising additional financing in the capital markets.

At the option of Alcatel-Lucent, the bonds may be subject to an early redemption under certain conditions.

The bonds will be rated by Moody's Investors Service and Standard & Poor's. Moody's assigned a Caa1 rating to the proposed notes.

Settlement will be June 10. An application is being made to list both bonds on the Euronext Paris exchange.

Paris-based Alcatel-Lucent is a voice, data and video communication services provider.

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