By Rebecca Melvin
Princeton, N.J., Jan. 19 - Hutchinson Technology Inc. priced an upsized $225 million of 20-year convertibles after the close of markets on Thursday, according to a company release.
The sale of convertible subordinated notes was increased from a planned $175 million.
The deal priced at the middle of talk for the coupon which was for 3% to 3.5%. Price talk for the initial conversion premium was 27.5% to 32.5%. But a syndicate source couldn't be reached a press time for the final initial conversion premium.
The deal was sold via bookrunner Merrill Lynch & Co., and with co-managers Citigroup Global Markets and Needham & Co.
There is an overallotment option to purchase up to an additional $25 million, or 14.3%, aggregate principal amount of the notes.
The bonds will be non-callable for five years, with puts in years seven, 10 and 15.
Proceeds are expected to be used for general corporate purposes, including capital expenditures for TSA suspension and TSA+ suspension manufacturing capacity, facilities and tooling, and for the development of new process technology.
Hutchinson, Minnesota-based is a supplier of suspension assemblies for disk drives.
| Issuer: | Hutchinson Technology Inc.
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| Issue: | Convertible subordinated notes
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| Bookrunner: | Merrill Lynch, with co-managers Citigroup Global Markets and Needham & Co.
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| Amount: | $225 million
|
| Greenshoe: | $25 million
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| Maturity: | Jan. 15, 2026
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| Coupon: | 3.25%
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| Price: | Par
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| Yield: | 3.25%
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| Calls: | Non-callable for five years
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| Puts: | In years seven, 10, 15
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| Price talk: | 3-3.5%, up 27.5-3.20%
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| Pricing date: | Jan. 19
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| Settlement: | Jan. 26
|
| Distribution: | Off the shelf
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