Oclaro to price $55 million five-year convertibles talked to yield 5.75%-6.25%, up 25%-30%

By Rebecca Melvin

New York, Feb. 12 – Oclaro Inc. launched an offering of $55 million of five-year convertible senior notes early Thursday for pricing after the market close. The notes were talked at a 5.75% to 6.25% coupon and a 25% to 30% initial conversion premium, according to market sources.

The Rule 144A deal has a $10 million greenshoe and was being marketed by Jefferies & Co.

If the stock price is at or above the conversion price, upon conversion, investors will receive the present value of the remaining interest payments to Feb. 15, 2018.

The bonds are non-callable for three years and then provisionally callable if shares exceed 130% of the conversion price. There is dividend and takeover protection.

Proceeds are earmarked for general corporate purposes, including working capital.

San Jose, Calif.-based Oclaro makes optical components, modules and subsystems used in telecommunications, data communications, aerospace and industry.

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