New Issue: Semco sells upsized $65 million convertible preferred to yield 5.0%, up 27.5%

Nashville, March 10 - Semco Energy Inc. sold an upsized $65 million of 10-year convertible preferreds at par of 200 with a dividend of 5.0% and a 27.5% initial conversion premium via bookrunner Credit Suisse First Boston.

The Rule 144A/Regulation S deal, boosted from $60 million, priced at the tight end of guidance for a 5.0% to 5.5% and at the middle of premium guidance of 25% to 30%.

The Michigan-based gas utility said proceeds would be used to purchase 52,542.94 of its 6% convertible preferreds plus warrants for 905,565 shares of common stock from k1 Ventures Ltd., plus accrued dividends if the new offering closes before March 19.

Terms of the deal are:

Issuer:	Semco Energy Inc.
Issue:	Convertible preferred shares
Bookrunner:	Credit Suisse First Boston
Amount:	$65 million, upped from $60 million
Greenshoe:	$5 million, unchanged
Maturity:	Feb. 20, 2015
Dividend:	5.0%
Price:	Par, $200
Yield:	5.0%
Conversion premium:	27.5%
Conversion price:	$7.65
Conversion ratio:	26.1438
Contingent conversion:	No
Contingent payment:	No
Dividend protection:	Yes
Takeover protection:	Yes
Call:	Non-callable for 5 years
Price talk:	5.0-5.5%, up 25-30%
Pricing date:	March 9, after market close
Settlement date:	March 15
Distribution:	Rule 144A/Regulation S

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