SWS Group plans to price $95 million five-year convertible notes to yield 6%-7.5%, up 20%-30%

By Rebecca Melvin

New York, Dec. 6 - SWS Group Inc. planned to price $95 million of five-year convertible senior notes after the market close on Wednesday that were talked to yield 6% to 7.5% with an initial conversion premium of 20% to 30%, according to a market source.

The registered, off-the-shelf offering has an over-allotment option for up to $14.25 million of additional notes.

The notes will be non-callable until Dec. 15, 2013 and then provisionally callable subject to a 130% price hurdle. There are no puts, and the conversion will be stock settled.

Proceeds will be used as a capital contribution to its banking subsidiary, and any remaining proceeds will be for general corporate purposes, which may include additional capital contributions to its banking subsidiary.

Bank of America Merrill Lynch is the bookrunner.

SWS Group is a Dallas securities and banking company.

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