The Pantry $130 million seven-year convertibles talked with 2.5%-3% coupon, up 27.5%-32.5%

By Rebecca Melvin

Princeton, N.J., Nov. 14 - The Pantry Inc. launched a $130 million offering of seven-year senior subordinated convertible notes, which were expected to price Wednesday after the close, according to a syndicate source.

The Rule 144A offering via bookrunner Merrill Lynch was talked with a coupon of 2.5% to 3% and an initial conversion premium of 27.5% to 32.5%.

There is a $20 million over-allotment option.

Proceeds will be used to pay down existing senior debt and for general corporate purposes, including acquisitions. Additionally, the company intends to use a portion of proceeds for the net cost of a convertible bond hedge and separate warrant transactions in connection with the notes.

Sanford, N.C.-based The Pantry operates a chain of convenience stores in the southeastern United States.

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