By Ronda Fears
Nashville, Tenn., March 21 - Lehman Brothers Holdings Inc. sold $500 million of 20-year convertible floating-rate notes at par with a coupon of three-month Libor minus 90 basis points, to be paid and reset quarterly, and a 48% initial conversion premium. Lehman Brothers was lead manager of the overnight registered deal, which sold at the aggressive end of price talk that put the premium at 40% to 48%.
There is a floor of 0% on the coupon but no cap as was the case with the first ever convertible floater - Merrill Lynch & Co.'s $2 billion issue two weeks ago, which sold at the 3-month Libor minus 200 basis points but was capped at 7.5%.
Terms of the new deal are:
Issuer: Lehman Brothers Holdings Inc.
Amount: $500 million
Greenshoe: $75 million
Lead Manager: Lehman Brothers
Maturity Date: April 1, 2022
Coupon: 3-month Libor minus 90 basis points
Issue Price: par
Yield: 1.071% initially based on 3-month Libor of 1.971%, reset quarterly
Conversion Premium: 48%
Conversion Price: $96.10
Conversion Ratio: 10.4062
Call: non-callable for two years, then at par
Put: in years two, five, 10 and 15
Ratings: Moody's: A2
| S&P: A
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| Settlement Date: | March 26
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