New Issue: Riverstone Networks $150 million convertibles at 3.75% yield, up 27%

By Ronda Fears

Nashville, Tenn., Nov. 15 - Riverstone Networks Inc. launched and priced intraday $150 million of five-year convertible subordinated notes at par to yield 3.75% with a 27% initial conversion premium. The Rule 144A deal, via lead manager Morgan Stanley, sold at the aggressive end of price talk that had put the yield between 3.75% and 4.25% with the premium in a range of 23% to 27%.

Proceeds are earmarked for general corporate purposes, including working capital and capital expenditures, the Santa Clara, Calif.-based Internet infrastructure equipment provider said.

Terms of the new deal are:

Issuer: Riverstone Networks Inc.

Amount: $150 million

Greenshoe: $25 million

Lead Manager: Morgan Stanley

Maturity Date: 2006

Coupon: 3.75%

Issue Price: par

Yield: 3.75%

Conversion Premium: 27% over intraday stock price of $14.30

Conversion Price: $18.16

Conversion Ratio: 55.066

Call: provisional all for three years with 150% trigger and

make-whole for coupon payments

Settlement Date: Nov. 21

End

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