Teradyne greenshoe fully exercised, lifts 4.75% five-year convertibles to $190 million

By Devika Patel

Knoxville, Tenn., April 2 - Underwriters for Teradyne Inc.'s 4.5% five-year convertible senior notes exercised their over-allotment option in full for $15 million more of the convertibles, increasing the size of the issue to $190 million, the company said in a news release.

As previously reported, the company sold the convertibles at par after the market close Tuesday in a registered offering via joint bookrunners Goldman, Sachs & Co. and Merrill Lynch & Co.

The bonds have a conversion premium of 25% and a conversion price of $5.475, which equals a conversion ratio of 182.6484.

The bonds are 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.

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