International Game to price $825 million 30-year convertibles, talked at 2.1%-2.6%, up 35%-40%

By Kenneth Lim

Boston, Dec. 13 - International Game Technology Inc. plans to price on Thursday after the market closes $825 million of 30-year convertible senior debentures, talked at a coupon of 2.1% to 2.6% and an initial conversion premium of 35% to 40%.

The debentures will be offered at par.

There is an over-allotment option for a further $75 million.

Merrill Lynch, Banc of America Securities, Goldman Sachs, Wachovia, UBS Investment Bank, Deutsche Bank and Bear Stearns are the bookrunners of the Rule 144A offering.

The debentures will be non-callable for the first three years. They may be put in years three, five, 10, 15, 20 and 25.

The debentures will have a contingent conversion hurdle at 130% of the conversion price and contingent payment at 120%.

The convertibles will have dividend and takeover protection.

There will be a net-share settlement feature.

International Game, a Reno, Nev.-based maker of gaming machines and systems, said it will use about $612 million of the proceeds and cash on hand to redeem its outstanding zero-coupon convertible debentures. It will also use about $225 million of the proceeds and cash on hand to concurrently buy back its common stock.

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