Lincare prices $500 million convertibles in two tranches; both at 2.75%, up 52.5%

New York, Oct. 25 - Lincare Holdings Inc. priced $500 million of convertible senior debentures due 2037 in two tranches, with both coming with a yield of 2.75% and an initial conversion premium of 52.5%.

The two tranches, priced after the close Thursday, were each sized at $250 million and each came at the middle of talk for a coupon of 2.75% to 3.25% and an initial conversion premium of 50% to 55%.

The conversion price is $51.27 and the conversion ratio is 19.5044.

Deutsche Bank and Merrill Lynch are joint bookrunners of the Rule 144A transaction. Each tranche has a $25 million over-allotment option.

The series A debentures have hard call protection for the first five years and puts in years five, 10, 15, 20 and 25.

The series B debentures have hard call protection for the first seven years and puts in years seven, 10, 15, 20 and 25.

Both tranches have contingent conversion subject to a 130% hurdle until Oct. 1, 2037 and a contingent payment trigger of 120%. Both tranches have net share settlement agreements and dividend and change of control protections.

Lincare provides oxygen and other respiratory therapy services to the home healthcare market. Lincare is based in Clearwater, Fla. The company plans to use $150 million to repurchase shares of its common stock. An undisclosed further amount may be used for further stock buybacks. The balance will be used to fund some acquisitions and for general corporate purposes.

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