Allegheny Technologies to sell $350 million five-year convertibles to yield 4%-4.5%, up 27.5%-32.5%

By Rebecca Melvin

New York, May 26 - Allegheny Technologies Inc. plans to price $350 million of five-year convertibles after the close Wednesday to yield 4% to 4.5% with an initial conversion premium of 27.5% to 32.5%, according to a syndicate source.

Allegheny also plans to price $300 million of 10-year senior straight notes.

Both offerings will be made under a shelf registration, but the offerings are not contingent on each other.

There is a greenshoe of up to $52.5 million of additional convertible notes.

J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. are the joint bookrunners for the convertible note offering.

The convertibles will be non-callable for life with no puts except a takeover put.

Conversion is via stock settlement only.

Proceeds of the convertibles are earmarked to manage liabilities and other obligations, such as by making voluntary contributions to the company's defined benefit pension trust and contributions to trusts established to fund retiree medical benefits.

Allegheny Technologies intends to use the net proceeds from the senior notes offering to purchase any and all of its outstanding 8.375% notes due 2011 under a tender offer. There were $300 million of 8.375% notes outstanding as of Tuesday.

Pittsburgh-based Allegheny is a diversified specialty metals producer.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.