PPL to price $1 billion mandatory convertible equity units to yield 9.25%-9.75%, up 17.5%-22.5%

By Rebecca Melvin

New York, June 21 - PPL Corp. plans to price $1 billion of mandatory convertible equity units at a par of $50 per unit on Wednesday after the close of markets.

The registered off-the-shelf mandatory securities were talked to yield 9.25% to 9.75% with an initial conversion premium of 17.5% to 22.5%, according to market sources.

There is an over-allotment option for an additional $150 million of units.

PPL also plans to sell 90 million shares of its common stock plus a 15% over-allotment.

Proceeds will fund a portion of the purchase price of the company's $7.6 billion acquisition of E.ON U.S., LLC, the parent company of Louisville Gas and Electric Co. and Kentucky Utilities Co.

The acquisition is subject to certain regulatory approvals and is expected to close later this year.

Credit Suisse, Barclays Capital Inc., J.P. Morgan Securities Inc., Bank of America Merrill Lynch and UBS Securities LLC are the joint bookrunners for the equity unit offering, with Citigroup Global Markets Inc., Morgan Stanley & Co. Inc. and Wells Fargo Securities acting as the senior co-managers.

Allentown, Pa.-based PPL produces and distributes electricity to about 4 million customers in Pennsylvania and the United Kingdom.

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