Veeco talks $200 million six-year convertible notes to yield 2.5%-3%, up 30%-35%

By Abigail W. Adams

Portland, Me., May 16 – Veeco Instruments Inc. plans to price $200 million of six-year convertible notes after the market close on Tuesday with price talk for a coupon of 2.5% to 3% and an initial conversion premium of 30% to 35%, according to a market source.

Barclays (lead left), Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Goldman Sachs & Co. LLC and Oppenheimer & Co. Inc. are bookrunners for the Rule 144A offering, which carries a greenshoe of $30 million.

ICR Capital LLC served as adviser to the company.

The notes are non-callable until June 8, 2026 and then subject to a 130% hurdle.

They will be settled in cash up to the principal amount with any remaining to be settled in cash, shares or a combination of both at the company’s option.

The company will enter into privately negotiated transactions with holders of its 3.5% convertible notes due 2025 and/or 3.75% convertible notes due 2027 to exchange a portion of the notes for cash, shares or a combination of both.

Proceeds will be used to cover the cost of the exchanges and for general corporate purposes.

Veeco is a Plainview, N.Y.-based semiconductor process equipment manufacturer.

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