New Issue: Providian $250 million convertible at 2.75% yield, up 45%

Nashville, March 16 - Providian Financial Corp. sold $250 million of 12-year convertible notes at par for a yield to maturity of 2.75% with a 45% initial conversion premium. The notes will pay a 2.75% cash coupon for seven years, then 1.75% plus an accreting amount for the full yield to maturity during the remaining five years.

The issue, via joint lead managers Citigroup Global Markets Inc., Goldman Sachs & Co. and Morgan Stanley & Co., priced at the cheap end of guidance for a 2.25% to 2.75% yield to maturity and 45% to 50% initial conversion premium.

The San Francisco-based financial services company will use proceeds for general corporate purposes.

Terms of the deal are:

Issuer:	Providian Financial Corp.
Issue:	Convertible senior notes
Joint lead managers:	Citigroup Global Markets Inc., Goldman Sachs & Co. and Morgan Stanley & Co.
Amount:	$250 million
Greenshoe:	$37.5 million
Maturity:	March 15, 2016
Coupon:	2.75% for 7 years, then 1.75% accreting to 2.75%
Price:	Par
Yield:	2.75%
Conversion premium:	45%
Conversion price:	$17.01
Conversion ratio:	58.7941
Contingent conversion:	120%
Call:	Non-callable for 7 years
Put:	In years 7 and 10
Price talk:	2.25-2.75%, up 45-50%
Pricing date:	March 15, after the close
Settlement date:	March 19
Distribution:	Off shelf

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