New Issue: Veeco upsized $200 million convertibles at 4.125% yield, up 25%

By Ronda Fears

Nashville, Tenn., Dec. 19 - Veeco Instruments Inc. sold an upsized $200 million of seven-year convertible subordinated notes at par to yield 4.125% with a 25% initial conversion premium. The Rule 144A deal, via book-running lead manager Merrill Lynch & Co., sold at the middle of price talk and was increased from $150 million.

Veeco Instruments, based in Woodbury, N.Y., makes process equipment and metrology tools for the optical telecom and wireless, data storage, semiconductor and research markets. The company said proceeds would be used for general corporate purposes, including capital expenditures and possible future acquisitions.

Terms of the new deal are:

Issuer: Veeco Instruments Inc.

Amount: $200 million

Greenshoe: $22.5 million

Book-Runner: Merrill Lynch

Joint Lead Manager: Salomon Smith Barney

Maturity Date: Dec. 24, 2008

Coupon: 4.125%

Issue Price: par

Yield: 4.125%

Conversion Premium: 25%

Conversion Price: $38.512

Conversion Ratio: 25.9656

Call: non-callable for three years, then at par

Settlement Date: Dec. 24

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