Ohio Casualty $125 million convertibles talked at 5.0-5.5% yield, up 22-27%

By Ronda Fears

Nashville, Tenn., March 12 - Ohio Casualty Corp.'s $125 million of 20-year convertible notes are talked to price at a yield of 5.0% to 5.5% and a 22% to 27% initial conversion premium. Salomon Smith Barney is lead manager of the Rule 144A deal, which is set to price after the close Wednesday.

The 20-year notes will be non-callable for five years, then at par. There are puts in years five and 10 at par.

The Fairfield, Ohio-based insurance holding company said proceeds will be used to repay bank debt.

Standard & Poor's has assigned a BB rating to the new issue, noting Ohio Casualty's regional business position, good capitalization, and improved investment strategy. S&P also revised the outlook to stable from negative.

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