American Equity to price $150 million five-year convertibles to yield 3.25%-3.75%, up 22.5%-27.5%

By Rebecca Melvin

New York, Sept. 15 - American Equity Investment Life Holding Co. plans to sell $150 million of five-year convertibles after the market close Thursday that were talked to yield 3.25% to 3.75% with an initial conversion premium of 22.5% to 27.5%, according to market sources.

J.P. Morgan Securities LLC is the bookrunner for the Rule 144A deal, which has a greenshoe of $50 million.

In connection with the offering, American Equity intends to enter into convertible note hedge and warrant transactions.

American Equity intends to use a portion of the proceeds to pay for the convertible note hedge transactions, with the balance of proceeds earmarked to repay outstanding amounts of principal and interest under its credit facility, to repurchase outstanding convertible notes and for general corporate purposes.

American Equity is a West Des Moines, Iowa-based underwriter of annuities and life insurance products.

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