By Ronda Fears
Nashville, June 18 - Reliant Resources Inc. sold an upsized $225 million of seven-year convertible notes at par to yield 5.0% with a 45% initial conversion premium - smack in the middle of price talk.
Deutsche Bank Securities Inc., Goldman Sachs & Co. and Banc of America Securities were joint bookrunners of the Rule 144A deal.
Next week, Reliant is expected to price $350 million of senior secured notes due 2010.
Banc of America Securities, Goldman Sachs, Deutsche Bank Securities and Barclays Capital are joint bookrunners of the Rule 144A junk bond offering.
The Houston-based energy firm plans to use proceeds from the junk bond to repay debt under its existing credit facility.
Convert proceeds are slated to pay existing bank credit lines and possibly exercise the purchase option on the Texas Genco power plant from former parent, CenterPoint Energy Corp.
Terms of the deal are:
Issuer: Reliant Resources Inc.
| Issue: | Convertible senior subordinated notes
|
| Joint bookrunners: | Deutsche Bank Securities, Goldman Sachs & Co. and Banc of America Securities
|
| Joint lead manager: | Barclays Capital Markets
|
| Co-managers: | ABN Amro and Commerzbank
|
| Amount | $225 million, upped from $200 million
|
| Greenshoe: | $50 million, unchanged
|
| Maturity: | Aug. 15, 2010
|
| Coupon: | 5.0%
|
| Price: | Par
|
| Yield: | 5.0%
|
| Conversion premium: | 45%
|
| Conversion price: | $9.54
|
| Conversion ratio: | 104.8218
|
| Call: | Non-callable for 5 years, then with a 125% hurdle
|
| Price talk: | 4.75-5.25%, up 43-47%
|
| Pricing date: | June 18 after close
|
| Settlement: | June 24
|
| Distribution: | Rule 144A
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