Teekay talks $100 million five-year convertibles to yield 4.75% to 5.25%, up 17.5% to 22.5%

By Abigail W. Adams

Portland, Me., Jan. 23 – Teekay Corp. plans to price $100 million in five-year convertible notes before the market open on Wednesday with price talk for a coupon of 4.75% to 5.25% and an initial conversion premium of 17.5% to 22.5%, according to a market source.

J.P. Morgan and Morgan Stanley are joint bookrunners for the Rule 144A deal, which carries a greenshoe of $15 million.

The convertibles are being offered concurrently with a $100 million offering of 10 million shares of common stock, according to a market source.

Morgan Stanley, J.P. Morgan Securities LLC, BofA Merrill Lynch, and UBS Securities LLC are joint bookrunners for the common stock offering, which carries a greenshoe of 1.5 million shares.

The five-year convertible notes are non-callable for three years then callable subject to a 130% hurdle. The notes have no puts but do have takeover protection.

Proceeds will be used for the repayment of debt and for general corporate purposes.

Teekay is a Hamilton, Bermuda-based provider of marine services to the oil and gas industry.

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