By Kenneth Lim
Boston, May 27 - Allegheny Technologies Inc. priced $350 million of five-year convertible senior notes in the middle of price talk to yield 4.25% with an initial conversion premium of 30%, according to a press release by the company.
The convertibles were sold at par.
There is an over-allotment options for an additional $52.5 million.
J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. were the bookrunners of the registered shelf offering.
Allegheny concurrently priced an upsized $350 million offering of 10-year senior notes with a coupon of 9.375% to yield 9.5%. The company initially planned to issue $300 million of straight debt.
The convertibles are non-callable with no puts except in a takeover.
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. Proceeds from the straight notes will be used to buy all of its $300 million principal amount of 8.375% notes due 2011 under a tender offer. Allegheny is offering $1.06 on the dollar for the 2011 notes.
Pittsburgh-based Allegheny is a diversified specialty metals producer.
| Issuer: | Allegheny Technologies Inc.
|
| Issue: | Convertible senior notes
|
| Bookrunner: | J.P. Morgan Securities Inc. and Citigroup Global Markets Inc.
|
| Amount: | $350 million
|
| Greenshoe: | $52.5 million
|
| Maturity: | June 1, 2014
|
| Coupon: | 4.25%
|
| Price: | Par
|
| Yield: | 4.25%
|
| Conversion premium: | 30%
|
| Conversion price: | $41.80
|
| Conversion ratio: | 23.9263
|
| Cash settlement option: | No
|
| Dividend protection: | Yes
|
| Takeover protection: | Change of control put
|
| Call: | Non-callable
|
| Puts: | None
|
| Price talk: | 4%-4.5%, up 27.5%-32.5%
|
| Pricing date: | May 27 after the close
|
| Distribution: | Off shelf
|
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