India's Subex Azure to price $180 million five-year 2% convertibles, to yield 8%-8.5%, up 5%

By Kenneth Lim

Boston, March 1 - India's Subex Azure Ltd. planned to price $180 million of five-year 2% convertible unsubordinated bonds on Thursday to yield 8% to 8.5% with an initial conversion premium of 5%.

The convertibles were offered at par.

There is no over-allotment option.

UBS Investment Bank was the bookrunner of the Regulation S offering.

The convertibles will be redeemed at 136.04% to 139.5% of the principal amount depending on where they price. The coupon may be reset to zero after the first two years if the closing price of Subex Azure stock trades above 150% of the conversion price for 30 straight trading days. If the coupon is reset, the redemption price will be adjusted to maintain the yield.

The convertibles are non-callable for the first three years, after which the bonds may be called subject to a hurdle at 140% of the conversion price. There are no puts.

The convertibles have dividend and takeover protection.

There is a cash-settlement option.

Subex Azure, a Bangalore, India-based provider of operations systems for telecommunications providers, plans to use $165.4 million of the proceeds to fund its planned acquisition of Syndesis Ltd. and for general purposes.

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