Spartan talks $75 million 20-year convertibles at 3%-3.5%, up 35%-40%, to price Wednesday

By Kenneth Lim

Boston, May 22 - Spartan Stores Inc. plans to price $75 million of 20-year convertible senior notes on Wednesday after the market closes, talked at a coupon of 3% to 3.5% and an initial conversion premium of 35% to 40%.

The convertibles will be offered at par.

There is an over-allotment option for a further $15 million.

Banc of America and Bear Stearns are the bookrunners of the Rule 144A offering.

Market sources said details about the convertibles such as the call protection, dividend and takeover protection will be available Wednesday morning.

Spartan, a Grand Rapids, Mich.-based grocery distribution company, said it will use the proceeds of the deal to repay an outstanding revolving loan and fund working capital, capital expenditures and other general corporate purposes.

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