New Issue: Sierra Pacific $300 million convertible PIES at 9.0% yield, up 20%

By Ronda Fears

Nashville, Tenn., Nov. 13 - Sierra Pacific Resources sold $300 million of four-year convertible premium income equity securities, or PIES, at par of 50 to yield 9.0% with a 20% initial conversion premium. Lehman Brothers was lead manager of the deal. The issue priced at the middle of price talk that put the yield between 8.75% and 9.25% and the premium at 18% to 22%.

Las Vegas-based Sierra Pacific, a utility holding company, plans to use proceeds for general corporate purposes, which may include financing the activities and capital expenditures of its utility subsidiaries, financing of assets and refinancing existing borrowings.

Each PIES consists of a four-year forward stock purchase contract that carries a 9% dividend rate, and a six-year senior unsecured note that carries a 7.93% coupon which will be reset when the forward stock purchase contract matures.

Terms of the new deal are:

Issuer: Sierra Pacific Resources

Amount: $300 million

Greenshoe: $45 million

Lead Manager: Lehman Brothers

Co-Managers: Merrill Lynch, Goldman Sachs and Wachovia Securities

Maturity Date: Nov. 15, 2005

Dividend: 9.0%

Issue Price: par, $50

Yield-to-maturity: 9.0%

Conversion Premium: 20%

Conversion Price: $13.85/$16.62

Conversion Ratio: 3.0084/3.6101

Call: non-callable

Settlement Date: Nov. 15

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