Alliant to price $270 million five-year convertibles, talked at 2.5%-3%, up 20%-25%

By Kenneth Lim

Boston, Sept. 6 - Alliant Techsystems Inc. planned to price Wednesday after the close $270 million of five-year convertible senior subordinated notes talked at a coupon of 2.5% to 3% and an initial conversion premium of 20% to 25%.

The notes were offered at par. There is an over-allotment option for a further $30 million.

Bank of America was the bookrunner for the Rule 144A offering.

The convertibles are non-callable, and there are no puts.

There is a contingent conversion hurdle at 130% of the conversion price.

The convertibles have dividend and takeover protection.

Alliant, an Edina, Minn.-based defense contractor, said it will use the proceeds to buy back $100 million of its own stock, to contribute to its defined benefit pension plan and for other general purposes. The company is also entering into convertible note hedge and warrant transactions.

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