Frontier Airlines $80 million 20-year convertibles talked to yield 5%-5.5%, up 20%-25%

By Rebecca Melvin

Princeton, N.J., Nov. 29 - Frontier Airlines Inc. plans to price $80 million of 20-year convertibles on Thursday after the close, according to a syndicate source.

Price talk on the debentures due 2025 was for a coupon of 5% to 5.5% with an initial conversion premium of 20% to 25%, the source said.

Morgan Stanley is bookrunner for the deal, with Citigroup Global Markets acting as co-manager.

There will be a $12 million over-allotment option.

The paper will be non-callable for five years and putable in year five.

Frontier plans to use proceeds to fund working capital and capital expenditures, including the purchase and financing of aircraft and expansion of its operations.

Denver-based Frontier Airlines is a low-cost, regional carrier with 49 aircraft.

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