L-3 Communications $500 million convertible talked to yield 3.0%-3.5%, up 30%-35%

By Ronda Fears

Nashville, July 27 - L-3 Communications Holdings Inc.'s $500 million offering of 30-year convertible notes is talked to yield 3.0% to 3.5% with a 30% to 35% initial conversion premium.

The convertible was slated to price after Wednesday's close alongside $1 billion of 10-year straight junk bonds, talked to yield 6.5% to 6.625%.

Proceeds will go toward the company's $2 billion acquisition of The Titan Corp.

On Tuesday, the New York-based defense contractor reported quarterly profit rose a better-than-expected 36% on growing military demand for its secure communications equipment.

Joint bookrunners on the convertible are Lehman Brothers, Bear, Stearns and Credit Suisse First Boston. Joint lead manager is Banc of America Securities LLC. Co-managers are Citigroup, Jefferies & Co., SG Cowen, SunTrust Robinson Humphrey and Wachovia.

The Rule 144A deal has a $100 million greenshoe available.

There is a 120% contingent conversion trigger. The 30-year notes are non-callable for five years.

Holders will have full takeover protection and dividend protection for any increases of $0.125 per share or more.

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