LDK Solar to price $300 million five-year convertibles to yield 3.5%-4.5%, up 25%-35%

By Rebecca Melvin

New York, April 8 - LDK Solar Co. Ltd. plans to price $300 million of five-year convertible senior notes after the market closes Wednesday, according to a market source.

The notes were talked to yield 3.5% to 4.5% with an initial conversion premium of 25% to 35%.

The Rule 144A deal will be sold via underwriters Morgan Stanley, UBS and J.P. Morgan Securities Inc.

The notes, which will be convertible into LDK Solar American Depositary Shares, will be non-callable for three years, with a soft call thereafter at a hurdle of 130%. There is a put in year three. The notes have full dividend and takeover protection and optional net-share settlement.

LDK plans to use proceeds to enter into forward contracts to buy back about $150 million of stock. Remaining proceeds will be used to fund construction of a polysilicon plant and to expand polysilicon wafer production.

LDK is a solar power wafer maker based in China's Xinyu City.

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