Liberty offers $550 million 30-year bonds exchangeable into Time Warner Cable, Time Warner stock

By Rebecca Melvin

New York, April 2 - Liberty Interactive Corp. launched an offering of $550 million of 30-year senior debentures exchangeable into shares of Time Warner Cable Inc. and Time Warner Inc. that were expected to price after the market close Wednesday, according to market sources.

Pricing of the Rule 144A exchangeable deal was talked at a 0.75% to 1% coupon and a fixed initial conversion premium of 10%.

There is no greenshoe, and proceeds of the new deal will be used to retire Liberty's outstanding 3.125% exchangeable senior debentures of its wholly owned subsidiary Liberty Interactive LLC due 2023.

Retirement of the old bonds, of which there were about $1.13 billion outstanding as of March 30, may take the form of open market or privately negotiated transactions. Any old bonds remaining outstanding after the closing of the new deal will be called.

Joint bookrunners are BNP Paribas Securities Corp. (billing & delivering and repurchase agent), BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, Barclays and Morgan Stanley & Co. LLC.

The debentures are non-callable until April 5, 2018 and then are provisionally callable until April 5, 2023 at a 120% price trigger.

There is an investor put at 10 years on March 30, 2023

There is dividend protection. Sixty-seven percent of the reference shares per debenture will be Time Warner Cable stock and 33% will be Time Warner stock.

Englewood, Colo.-based Liberty Interactive owns interests in electronic retailing, media, communications and entertainment businesses.

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