Raser Technologies to price $75 million five-year convertibles to yield 5.5%-6.5%, up 20%-30%

By Rebecca Melvin

New York, March 11 - Raser Technologies Inc. plans to price $75 million of five-year convertible bonds after the close on Thursday, according to a syndicate source.

There is a $25 million over-allotment option on the Rule 144A offering.

Price talk on the senior convertible notes is for a coupon of 5.5% to 6.5% with an initial conversion premium of 20% to 30%. Merrill Lynch is the bookrunner.

A portion of proceeds will be placed in an escrow account that will be invested in government securities to fund the first four interest payments.

The notes are non-callable for life, and there are no puts.

There is full dividend protection via a conversion ratio adjustment and change-of-control protection through a make-whole adjustment premium delivered upon conversion as incremental shares. Conversion settlement will be stock with fractional shares paid in cash.

Most of the net proceeds will be used to continue well field and other development activities for geothermal power plants that Raser intends to develop and for general corporate purposes.

In addition, Raser expects to use a portion of net proceeds to fund the interest escrow account and fund the cost of call spread and prepaid forward share repurchase transactions.

Provo, Utah-based Raser is a technology licensing and development company focused on geothermal power generation.

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