Hitachi to price ¥100 billion five-year convertible bonds to yield 0.10%-0.40%, up about 130%

By Rebecca Melvin

New York, Nov. 16 - Hitachi Ltd. planned to price ¥100 billion of five-year convertible bonds to yield between 0.10% and 0.40% and with an initial conversion premium of about 130%, according to a news release.

The interest rate will be determined on Nov. 27, and the conversion price will be determined between Dec. 7 and Dec. 10 via a formula set Nov. 27.

Hitachi also plans to sell 1.09 billion shares of common stock.

Proceeds from the Japanese and international share offerings, the issuance of new shares by way of third-party allotment, and the issuance of the convertible bonds, estimated to be ¥415.67 billion, are expected to fund capital expenditures of ¥220 billion, to make investments of ¥40 billion to strengthen its social innovation business and to repay Hitachi debt.

Hitachi's social innovation business consists of its information and telecommunication systems and social infrastructure businesses.

The bonds will be non-callable until Jan. 3, 2013 and then provisionally callable if Hitachi shares are 130% of the conversion price for 20 continuous trading days.

The bonds will mature Dec. 12, 2014.

Tokyo-based Hitachi is an electronics conglomerate.

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