By Rebecca Melvin
New York, April 1 - Teradyne Inc. priced an upsized $175 million of five-year convertible senior notes after the market close Tuesday at par to yield 4.5% with an initial conversion premium of 25%, according to a syndicate source.
The registered deal came on the rich end of revised talk, which was 4.5% to 5% for the coupon with a 25% premium. Original talk was 5.75% to 6.25% for the coupon with an initial conversion premium of 20% to 25%.
The deal was upsized by $25 million from an initially talked $150 million. There is a $15 million greenshoe, which was downsized from an initially expected $22.5 million.
Goldman Sachs & Co. and Merrill Lynch & Co. were joint bookrunners of the offering.
The bonds will be non-callable, with no investor puts.
Teradyne has also entered into convertible note hedge and warrant transactions with Goldman Sachs and affiliates. These increase the effective conversion premium from the company's perspective to 75%.
The company plans to use $122.5 million of proceeds and proceeds from the warrant transaction to repay and terminate its senior secured credit facility. In addition, about $59.5 million will pay for convertible note hedge transactions. And any remaining proceeds will be used for general corporate purposes.
Based in North Reading, Mass., Teradyne supplies automatic test equipment used in the consumer electronics, automotive, computing, telecommunications, and aerospace and defense industries.
| Issuer: | Teradyne Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $175 million, upsized from $150 million
|
| Greenshoe: | $15 million, downsized from $22.5 million
|
| Maturity: | March 15, 2014
|
| Bookrunners: | Goldman Sachs & Co. and Merrill Lynch & Co.
|
| Coupon: | 4.5%
|
| Price: | Par
|
| Yield: | 4.5%
|
| Conversion premium: | 25%
|
| Conversion price: | $5.4750
|
| Conversion ratio: | 182.6484
|
| Price talk: | 4.5%-5%, revised from 5.75%-6.25%; up 25%, revised from 20% to 25%
|
| Call: | Non-callable for life
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes, in the form of a conversion rate adjustment
|
| Pricing date: | March 31
|
| Settlement date: | April 6
|
| Distribution: | Registered
|
| Stock symbol: | NYSE: TER
|
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