By Ronda Fears
Nashville, Tenn., Nov. 5 - Aon Corp. sold an upsized $250 million of 10-year convertible senior unsecured notes at par to yield 3.5% with a 25% initial conversion premium via sole lead manager Morgan Stanley.
Price talk on the deal, which was upped from $200 million, had put the premium between 22% and 26% and the yield at 3.5%.
Chicago-based Aon also sold 32 million shares of common stock at $17.18 each, fetching another $550 million.
The insurance holding company plans to use proceeds from the offerings to pay down short-term debt.
Last Thursday, Aon reported third quarter earnings increased 78%, but said it would reduce its quarterly dividend to 15c from 22.5c.
Terms of the convertible deal are:
| Issuer: | Aon Corp.
|
| Amount: | $250 million, up from $200 million
|
| Greenshoe: | $50 million, up from $30 million
|
| Lead manager: | Morgan Stanley
|
| Maturity date: | Nov. 15, 2012
|
| Coupon: | 3.5%
|
| Issue price: | Par
|
| Conversion premium: | 25%
|
| Conversion price: | $21.475
|
| Conversion ratio: | 46.5658
|
| Call: | Non-callable for five years
|
| Put: | In year seven, at par
|
| Contingent conversion: | 120% trigger
|
| Contingent payment: | 120% trigger
|
| Expected Ratings: | Moody's: Baa2
|
| S&P: A-
|
| Settlement date: | Nov. 7
|
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