Nextel Partners $125 million overnighter talked to yield 1.5%, up 31%

By Ronda Fears

Nashville, July 29 - Nextel Partners Inc. launched $125 million of 5.25-year convertible senior notes talked to yield 1.5% with a 31% initial conversion premium, for pricing early Wednesday, settling buzz in the market that has circulated for several weeks.

Wachovia Securities, Inc. is sole bookrunner of the Rule 144A deal, with Credit Suisse First Boston as co-manager. It is scheduled to price before 9:30 a.m. ET.

The company's earnings conference call is at 11 a.m. ET

Nextel Partners said proceeds will be used for general corporate purposes, including but not limited to general working capital and opportunistic repurchases of outstanding notes.

There had been chatter in the convertible for a couple of weeks that Nextel Partners would be returning to the convertible market, after tapping convert players in early May, but that cooled down after Nextel Communications Inc. made a $1 billion junk bond offering about 10 days ago.

Nextel Partners offers a package of wireless services under the Nextel Communications brand name, targeting primarily business users.

On May 7, Nextel Partners sold an upsized $150 million of 5.5-year convertible senior notes at par to yield 1.5% with a 42.5% initial conversion premium in the Rule 144A market via lead manager Morgan Stanley.

That deal was upped from $125 million and sold at the aggressive end of guidance that put the yield at 1.5% to 2.0% and initial conversion premium at 37.5% to 42.5% initial.

The company said those proceeds would be used for general corporate purposes, also including potential opportunistic purchases of outstanding debt.

The existing Nextel Partners 1.5% converts gained 1.25 points on Tuesday, closing at 144.125 bid, 145.125 offered. The underlying stock ended up by 18c, or 1.88%, to $9.75.

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