Alcoa offers $1.25 billion three-year mandatory convertible preferreds to yield 5%-5.5%, up 20%-25%

By Rebecca Melvin

New York, Sept. 15 – Alcoa Inc. plans to price $1.25 billion of three-year mandatory convertible preferred shares with a $50.00 per share liquidation preference price that were talked to yield 5% to 5.5% with an initial conversion premium of 20% to 25%, according to a market source.

Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC are acting as joint bookrunners of the registered off-the-shelf deal, which was expected to price after the market close on Tuesday.

Proceeds will be used to finance the previously announced proposed acquisition of the Firth Rixson business and related fees. Completion of the offering is not contingent on the acquisition.

Alcoa is a New York-based aluminum producer.

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