New Issue: Covad upsized $100 million convertible yields 3.0%, up 18%

Nashville, March 5 - Covad Communications Group Inc. sold an upsized $100 million of 20-year convertible notes at par to yield 3.0% with an 18% initial conversion premium via sole bookrunner Banc of America Securities.

The Rule 144A deal, upped from $75 million, sold at the cheap end of guidance for a 2.5% to 3.0% coupon and an 18% to 23% initial conversion premium.

Holders will have full dividend protection.

The San Jose, Calif.-based digital subscriber line service provider said proceeds would be used to repay a loan from SBC Communications, which has an 11% interest rate, with the remainder going toward working capital and general corporate purposes.

Terms of the deal are:

Issuer:	Covad Communications Group Inc.
Issue:	Convertible senior notes
Bookrunners:	Banc of America Securities
Amount:	$100 million, up from $75 million
Greenshoe:	$25 million, unchanged
Maturity:	March 15, 2024
Coupon:	3.0%
Price:	Par
Yield:	3.0%
Conversion premium:	18%
Conversion price:	$3.1742
Conversion ratio:	315.04
Call:	Non-callable for 5 years
Put:	In years 5, 10 and 15
Price talk:	2.5-3.0%, up 18-23%
Pricing date:	March 4, after the close
Settlement date:	March 10
Distribution:	Rule 144A

© 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.