AOL plans $300 million five-year convertibles talked at 0.625%-1.125%, up 32.5%-37.5%

By Rebecca Melvin

New York, Aug. 12 – AOL Inc. plans to price $300 million of five-year convertible senior notes after the market close on Wednesday that were talked to yield 0.625% to 1.125% with an initial conversion premium of 32.5% to 37.5%, according to a market source.

The Rule 144A offering has a $45 million greenshoe and was being sold via Goldman Sachs & Co. and J.P. Morgan Securities LLC.

In connection with the offering of notes, AOL plans to enter into privately negotiated convertible note hedge and warrant transactions, or a call spread.

Proceeds from the offering will be used to fund the net cost of the call spread as well as to fund the repurchase of up to $50 million of common shares as part of a previously announced $150 million share repurchase program.

Remaining proceeds will be for general corporate purposes, which may include share repurchases, acquisitions, and other strategic transactions and working capital.

New York-based AOL is a digital brands, products and services company.

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