Teradyne’s $400 million seven-year convertible bonds talked to yield 1.25%-1.75%, up 22.5%-27.5%

By Stephanie N. Rotondo

Seattle, Dec. 6 – Price talk emerged on Teradyne Inc.’s proposed $400 million Rule 144A offering of senior convertible notes due Dec. 15, 2023 on Tuesday.

The coupon is being talked at 1.25% to 1.75% with an initial conversion premium of 22.5% to 27.5%.

The deal was first announced Monday. Pricing is expected after Tuesday’s close.

Barclays and BofA Merrill Lynch are the joint bookrunners. Wells Fargo Securities LLC is the co-manager.

There is a $60 million over-allotment option.

Interest will be payable semiannually in cash. Conversions will be settled in cash, common shares or a combination thereof.

The company plans to use the proceeds, in part, to pay for convertible note hedge transactions associated with the offering. The company also plans to use the funds to repurchase up to $80 million in common stock under its existing share repurchase authorization.

In connection with the offering, Teradyne said its board of directors had approved a new $500 million share repurchase program that will go into effect on Jan. 1. The current authorization expires Dec. 31.

Teradyne is a North Reading, Mass.-based developer and supplier of automatic test equipment.

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