Pioneer prices upsized $440 million convertible notes at 2.875%, up 65%

New York, Jan. 15 - Pioneer Natural Resources Co. priced an upsized $440 million in convertible senior notes due Jan. 15, 2038 to yield 2.875% with a 65% initial conversion premium.

The convertibles were increased from a planned amount of $400 million and came at the rich end of talk, which put the coupon at 2.875% to 3.375% and the initial conversion premium at 60% to 65%.

Credit Suisse and UBS Investment Bank are joint bookrunners of the Securities and Exchange Commission registered transaction.

There is a $60 million over-allotment option, unchanged from the original amount.

The convertibles priced Tuesday after the market close.

The conversion price is $72.60 and the ratio 13.7741.

In addition, if Pioneer stock is above the conversion price at the time of conversion, investors will receive up to 8.9532 additional shares, depending on a formula.

The convertibles are callable beginning Jan. 15, 2013. There are put options on Jan. 15 in each of 2013, 2018, 2023, 2028 and 2033.

There is a contingent conversion subject to a 130% hurdle beginning March 31.

The convertibles carry fundamental change and takeover protection and a net share settlement agreement.

Pioneer is a Dallas-based oil and gas driller. The company plans to use the proceeds to repay some of its outstanding bank debt.

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