Linear talks $1.7 billion 20-year convertibles in two tranches at 2.75%-3.25%, up 38%-43% and 40%-45%

By Kenneth Lim

Boston, April 17 - Linear Technology Corp. plans to price $1.7 billion of 20-year convertible senior notes in two tranches on Wednesday after the market closes. The $1 billion A series is talked at a coupon of 2.75% to 3.25% and an initial conversion premium of 38% to 43%, while the $700 million B series is talked at a coupon of 2.75% to 3.25% with an initial conversion premium of 40% to 45%.

The convertibles will be offered at par.

There is no over-allotment option.

Credit Suisse is the bookrunner of the Rule 144A offerings.

The series A convertibles will be non-callable for the first seven years and may be put in years seven, 10 and 15. The series B convertibles will be non-callable for the first 3.5 years and may be put in years 3.5, 10 and 15.

There will be a contingent conversion trigger at 130% of the conversion price for both series. There will be contingent payment.

The convertibles will have dividend and takeover protection.

There will be a net-share settlement option.

Linear Technology, a Milpitas, Calif.-based maker of linear integrated circuits, said it will use the proceeds of the deal to partly fund a planned $3 billion accelerated stock buyback.

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