New Issue: Anthem $200 mln mandatory convertibles at 6.0% yield, up 22%

By Ronda Fears

Nashville, Tenn., Oct. 30 - Anthem Inc. sold $200 million of five-year mandatory convertible preferreds at par of 50 to yield 6.0% with a 22% initial conversion premium, via bookrunning manager Goldman Sachs & Co. The registered deal, which priced alongside the insurance firm's initial public offering, sold at the rich end of price talk. Indianapolis, Ind.-based Anthem sold an upsized IPO at $36 per share, fetching $1.73 billion with the stock pricing at the upper end of guidance of $33 to $37 per share.

Before pricing, the common stock offering was upped twice, first from original plans to issue 28.6 million shares to 40 million and then to the 48 million shares that were issued. The convertible was talked to price to yield 6.0% to 6.5% yield with an initial conversion premium of 18% to 22%. Proceeds are earmarked for Anthem, which operates as a Blue Cross & Blue Shield insurance firm, to demutualize.

Terms of the new convertible deal are:

Issuer: Anthem Inc.

Amount: $200 million

Greenshoe: $30 million

Lead manager: Goldman Sachs

Maturity Date: November 2006

Dividend: 6.0%

Issue Price: par of 50

Yield: 6.0%

Conversion Premium: 22%

Conversion Price: $43.92

Conversion Ratio: 1.1384

Call: non-callable

Settlement Date: Nov. 2

End

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