IPC to issue 11 million mandatory convertible preferred shares, talked to yield 7%-7.5%, up 18%-22%

By Rebecca Melvin

Princeton, N.J., Oct. 26 - IPC Holdings Ltd. is planning to price 11 million mandatory convertible preferred shares on Nov. 1 after the close, according to a syndicate source.

The issue price will be the same as the stock price at issue.

The registered shares will be sold via bookrunners Morgan Stanley and Citigroup, with Wachovia as joint lead manager and co-manager Keefe Bruyette & Woods.

The shares were talked to yield 7% to 7.5% for the coupon, with an initial conversion premium of 18% to 22%. The shares mature in three years.

Concurrent with the preferred offering, the company will issue 12 million shares of common stock, with a 1.2 million share greenshoe.

The preferred shares have dividend and takeover protection.

The Bermuda-based reinsurance company plans to use proceeds to provide additional capital for reinsurance operations and for general corporate purposes.

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