LodgeNet Interactive talks $50 million perpetual convertible preferreds at 8%-9%, up 10%-20%

By Kenneth Lim

Boston, June 22 - LodgeNet Interactive Corp. plans to price $50 million of series B perpetual convertible preferred stock Tuesday after the market closes with price talk at a dividend of 8% to 9% and an initial conversion premium of 10% to 20%, market sources said.

There is an over-allotment option for an additional $7.5 million.

Bank of America/Merrill Lynch is the bookrunner for the Rule 144A offering.

The preferreds are callable subject to a hurdle at 150% of the conversion price and a make-whole dividend payment for the first three years. Thereafter, the preferreds may be called subject to a hurdle at 125% of the conversion price.

Proceeds will be used to reduce the outstanding balance on a term loan and for general working capital.

LodgeNet is a Sioux Falls, S.D.-based provider of interactive media and connectivity solutions to the hospitality industry.

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