New Issue: TXU ups mandatory cvts to $875 mln, sold at 8.75% yield, up 22%

By Ronda Fears

Nashville, Tenn., Oct. 11 - TXU Corp. sold $875 million of mandatory convertible units to yield 8.75% with a 22% initial conversion premium, upsizing the deal amount from $750 million. Goldman Sachs and Merrill Lynch were joint book-running lead managers of the registered deal, which sold at the aggressive end of price talk that put the yield between 8.75% and 9.25%. The deal sold beyond the aggressive end of premium guidance, which was in a range of 18% to 20%.

Each unit consists of two par $25 notes with forward stock purchase contracts. The Dallas-based utility holding company plans to use proceeds to pay down debt and general corporate purposes.

Terms of the new deal are:

Issuer: TXU Corp.

Amount: $875 million, up from $750 million

Greenshoe: $125 million, up from $112.5 million

Lead Managers: Goldman Sachs and Merrill Lynch

Maturity Date: Nov. 16, 2004 and Nov. 16, 2005

Coupon: 8.75%

Issue Price: par $25 per note, $50 per unit

Yield: 8.75%

Conversion Premium: 22%

Conversion Price: $45.64 to $55.68

Conversion Ratio: 0.449 to 0.5478

Call: non-callable

Settlement Date: Oct. 16

End

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