St. Mary talks $250 million 20-year convertibles at 3.5%-4%, up 47.5%-52.5%, to price Thursday

By Kenneth Lim

Boston, March 28 - St. Mary Land & Exploration Co. plans to price $250 million of 20-year convertible senior notes on Thursday after the market closes, talked at a coupon of 3.5% to 4% and an initial exchange premium of 47.5% to 52.5%.

The notes will be offered at par.

There is an over-allotment option for a further $37.5 million.

Merrill Lynch and Wachovia Securities are the bookrunners of the Rule 144A offering.

The notes will be non-callable for the first five years. They may be put in years five, 10 and 15.

There will be a contingent conversion trigger at 130% of the conversion price and contingent payment at 120% of the principal.

The notes will have dividend and takeover protection.

There will be a net-share settlement feature.

St. Mary, a Denver-based oil and gas exploration company, said the proceeds of the deal will be used to repay outstanding revolving debt.

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