Lennox $100 million convertibles talked at 6.25-6.75% yield, up 20-25%

By Ronda Fears

Nashville, Tenn., April 29 - Lennox International Inc. launched $100 million of seven-year convertible subordinated notes talked to yield 6.25% to 6.75% with a 20% to 25% initial conversion premium. The Rule 144A deal is set to price this week via lead manager UBS Warburg.

Market sources are expecting the deal to price after the close Tuesday.

First Union Securities is a co-manager.

One sellside convertible analyst said the deal was 2.5% rich at the midpoint of price talk, assuming a credit spread of 750 basis points over Treasuries and 20% volatility in the stock, or about 1.6% rich using a spread of 700 basis points.

Another sellside convertible analyst put the deal about 3.3% cheap at the midpoint of guidance, assuming a credit spread of 700 basis points and 35% volatility in the stock.

Dallas-based Lennox, a heating and air conditioning company, plans to use proceeds to repay a portion of its existing credit facility.

Lennox shares closed down $1.26 to $14.70.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.