Herbalife plans to sell $1 billion 5.5-year convertible notes to yield 1.5%-2%, up 25%-30%

By Rebecca Melvin

New York, Feb. 3 - Herbalife Ltd. launched an offering of $1 billion of 5.5-year convertible senior notes early Monday that was expected to price after the market close and was talked to yield a coupon of 1.5% to 2% and an initial conversion premium of 25% to 30%, according to a syndicate source.

The Rule 144A offering has a $150 million greenshoe and was being sold via joint bookrunners BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, HSBC Securities (USA) Inc. and Morgan Stanley & Co. LLC.

Proceeds will be used for working capital and general corporate purposes, including the repurchase of outstanding common shares.

The deal is coming together with a call spread. The company plans to enter into one or more forward-share repurchase transactions and capped call transactions with initial purchasers of the bonds.

George Town, Cayman Islands-based Herbalife is a nutrition company that makes vitamins, skin creams and meal-replacement shakes.

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