Ferro prices $150 million convertibles to yield 6.5%, up 60%

New York, Aug. 13 - Ferro Corp. priced $150 million of convertible senior notes due 2013 to yield 6.5% with a 60% initial conversion premium after the close Wednesday.

The deal came at the cheap end of talk for a yield of 6% to 6.5% and an initial premium of 60% to 65%.

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

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

Subject to a contingent conversion threshold, the conversion price is $32.34 and the conversion ratio is 30.9253.

In addition, if the company's stock exceeds the conversion price during an averaging period, holders will receive up to an additional 18.5552 shares, with the exact amount to be set by a formula.

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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