LifePoint prices $500 million seven-year convertibles at 3.5%, up 36.5%

New York, May 22 - LifePoint Hospitals Inc. priced $500 million of seven-year convertible senior subordinated notes on Tuesday after the market closed to yield 3.5% with a 36.5% initial conversion premium.

The deal priced within talk that had put the coupon at 3.25% to 3.75% and the initial conversion premium at 32.5% to 37.5%.

The conversion price is $51.79 and the conversion ratio 19.3095.

There is an over-allotment option for an additional $75 million.

Citigroup is the bookrunner of the registered offering.

The convertibles will be non-callable and may not be put.

There will be a contingent conversion trigger at 130% of the conversion price.

The convertibles will have dividend and takeover protection.

There will be a net-share settlement feature.

LifePoint, a Brentwood, Tenn.-based non-urban hospital company, said it will use the proceeds of the deal to repay an outstanding revolving loan that bears an annual interest of 7.11% and an outstanding term loan that bears an average annual interest of 6.97%.

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