Seaspan plans to price $125 million five-year convertibles to yield 2.75%-3.25%, up 22.5%-27.5%

By Rebecca Melvin

New York, Oct. 7 - Seaspan Corp. plans to price $125 million of five-year convertible notes in a registered offering that was seen pricing Thursday and was talked to yield 2.75% to 3.25% with an initial conversion premium of 22.5% to 27.5%, according to a market source.

Seaspan is also pricing 5.7 million shares of common stock in a primary offering and issuing and lending 2.53 million shares to an affiliate of Deutsche Bank Securities Inc., which will sell the borrowed shares to investors of the convertible bonds.

In addition, a selling shareholder is also offering 300,000 common shares in a secondary offering.

There is a greenshoe for up to $18.75 million.

The convertible notes are non-callable with no puts.

Proceeds from the primary stock offering and convertibles will be used for general corporate purposes, which may include funding vessel acquisitions. The company will not receive proceeds from the secondary or borrowed shares offerings but will receive a nominal lending fee for the use of the borrowed shares, which Seaspan intends to use for general corporate purposes.

Deutsche Bank, BofA Merrill Lynch, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are acting as joint bookrunning managers of the convertibles offering.

Seaspan is a Hong Kong-based containership company.

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