Southern Union $125 million mandatory talked to yield 5.75-6.25%, up 18-22%

By Sara Rosenberg

New York, May 29 - Southern Union Co.'s $125 million three-year mandatory convertible equity units offering, which is scheduled to price June 5, is talked to yield 5.75% to 6.25% with an initial conversion premium of 18% to 22%, according to sources.

J.P. Morgan Securities Inc. and Merrill Lynch & Co. are joint bookrunning managers on the registered deal. Co-managers are Credit Suisse First Boston, Wachovia, Credit Lyonnais, Jefferies, Gilford, Wells Fargo, Fleet and Banc One.

The issue price per unit is $50.00.

There is a 15% greenshoe or $18.75 million.

Expected ratings for the deal are Baa3 from Moody's Investors Service and BBB from Standard & Poor's.

Proceeds will be used by the Wilkes-Barre, Pa. distributor and seller of natural gas to fund a portion of its acquisition of Panhandle Eastern Pipe Line Co. and its subsidiaries, reduce debt and for general corporate purposes.

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