Spansion to price $240 million of 10-year convertibles Tuesday, talked at 2%-2.5%, up 17.5%-22.5%

By Kenneth Lim

Boston, June 5 - Spansion Inc. plans to price on Tuesday after the market closes $240 million of 10-year senior subordinated exchangeable debentures, talked at a coupon of 2% to 2.5% and an initial conversion premium of 17.5% to 22.5%.

There is an over-allotment option for a further $35 million.

Citigroup and Credit Suisse are the bookrunners of the Rule 144A deal, which will be offered through Spansion's Spansion LLC operating subsidiary.

The debentures will be non-callable for life, and there are no investor puts.

There is a contingent conversion threshold at 120% of the conversion price, and there is no contingent payment.

The debentures have standard dividend and takeover protection.

Spansion, a Sunnyvale, Calif.-based maker of flash memory products, said it will use the proceeds of the offering to repay its entire outstanding 12.75% senior subordinated notes due 2016 and for capital expenditures, working capital and other general corporate purposes.

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