Ferro to price $150 million five-year convertibles to yield 6%-6.5%, up 60%-65%

By Rebecca Melvin

New York, Aug. 12 - Ferro Corp. plans to price $150 million of five-year convertible senior notes after the market close Wednesday to yield 6% to 6.5% with an initial conversion premium of 60% to 65%, according to a syndicate source.

There is an over-allotment option of 15%, or $22.5 million.

Citigroup Global Markets, Credit Suisse Securities and J.P. Morgan Securities Inc. are joint bookrunners of the registered offering.

The bonds are non-callable for life, and there are no puts. They will have dividend protection in the form of a standard conversion ratio adjustment and acquisition make-whole protection via a standard table for fundamental change.

There is also contingent conversion at a stock price trigger of 130% and a parity trigger of 97%.

Proceeds will be used to purchase or redeem all of the company's outstanding 9.125% senior notes due 2009.

Ferro is a Cleveland-based supplier of specialty materials and chemicals for makers of electronics, solar energy, telecom, pharmaceutical, building, automotive and other household and industrial products.

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