Lockheed $850 million convertible floater talked at 3-mo Libor minus 45-90 bps, up 52.5-57.5%

By Ronda Fears

Nashville, Aug. 6 - Lockheed Martin Corp. launched $850 million of 30-year cash-to-zero convertible floating rate notes talked to yield three-month Libor minus 45 to 90 basis points with a 52.5% to 57.5% initial conversion premium.

Joint bookrunners are Goldman Sachs & Co., Citigroup, and JP Morgan. The Rule 144A deal is slated to price after the market close Thursday.

The issue will pay a cash coupon for five years, then accrete the yield until maturity.

The senior unsecured notes will be non-callable for five years, with a put in year five. Also, there is a contingent conversion trigger of 130% and contingent interest trigger of 120%.

Holders will have dividend protection in the form of a conversion ratio adjustment.

There is a $150 million greenshoe available.

The Bethesda, Md. defense company also announced Wednesday that it intends to purchase for cash up to $1.15 billion of its outstanding 7.25% notes due 2006 and the 8.375% debentures due 2024 originally issued by Loral Corp. The tender offers will commence on Thursday and expire Aug. 14, unless extended or terminated.

The 7.25% notes will be repurchased through JPMorgan and the 8.375% debentures through Goldman.

Lockheed shares closed Wednesday up 73c, or 1.46%, to $50.90.

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