By Ronda Fears
Nashville, Tenn., March 14 - Ohio Casualty Corp. sold an upsized $175 million of 20-year convertible notes at par to yield 5.0% with a 27% initial conversion premium. Merrill Lynch & Co. and Salomon Smith Barney were joint lead managers of the Rule 144A deal, which was increased from $125 million and sold at the aggressive end of price talk that put the yield at 5.0% to 5.5% and initial conversion premium at 22% to 27%.
The Fairfield, Ohio-based insurance holding company said proceeds will be used to repay bank debt.
Terms of the new deal are:
Issuer: Ohio Casualty Corp.
Amount: $175 million, up from $125 million
Greenshoe: $26.25 million, up from $18.75 million
Lead Managers: Merrill Lynch and Salomon Smith Barney
Maturity Date: March 19, 2007
Coupon: 5.0%
Issue Price: par
Yield: 5.0%
Conversion Premium: 27%
Conversion Price: $22.619
Conversion Ratio: 44.2112
Call: non-callable for three years
Put: in years three, five, 10 and 15
Settlement Date: March 19
Ratings: Moody's: Baa2
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