Ohio Casualty deal upsized to $175 million

By Ronda Fears

Nashville, Tenn., March 13 - Ohio Casualty Corp.'s offering of 20-year convertible notes was upsized to $175 million from $125 million on strong demand, sources said. The deal is still expected to price to yield 5.0% to 5.5% with 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.

Ohio Casualty shares closed off 27c to $17.83.

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