By Sara Rosenberg
New York, Oct. 25 - Household International Inc. sold $500 million of three-year mandatory convertibles using the ACES structure at par of $25 to yield 8.875% and with a 20% initial conversion premium.
Goldman Sachs & Co. led the deal.
It was priced 0.07% rich to theoretical value off a $21.40 stock price, according to Kimberlee Brody, a Wachovia Securities analyst, who used a volatility assumption of 60%, a credit spread assumption of 600 basis points and stock dividend of $1.
The issue has a coupon of 8.875%.
The deal was part of a series of transactions which the company said are intended to "significantly strengthen" its capital base.
In addition to the units, the Prospect Heights, Ill. finance company also issued 18.7 million shares, raising proceeds of $400 million and agreed to sell $3.2 billion of loans and $4.3 billion of thrift-related deposits.
Terms of the new deal are:
| Issuer: | Household International
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| Amount: | $500 million
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| Greenshoe: | $75 million
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| Lead manager: | Goldman Sachs & Co.
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| Maturity date: | Oct. 30, 2005
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| Coupon: | 8.875%
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| Issue price: | Par of $25
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| Yield: | | 8.875%
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| Conversion premium: | 20%
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| Conversion price: | $25.68
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| Conversion ratio: | 0.9735/1.1682
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| Call: | Non-callable
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| Put: | Non-putable
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| Ratings: | Moody's: NR
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| S&P: NR
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| Settlement date: | Oct. 30
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