Verigy talks $110 million five-year convertibles to yield 5.5%-6%, up 20%-25%

By Rebecca Melvin

New York, July 8 - Verigy Ltd. plans to price $110 million of five-year convertibles after the market close Thursday to yield 5.5% to 6% with an initial conversion premium of 20% to 25%, according to market source.

The Rule 144A offering has a greenshoe of $16.5 million of notes.

Morgan Stanley & Co. Inc. and J.P. Morgan Securities Inc. are joint bookrunners.

The notes are non-callable for three years until July 20, 2012 and provisionally callable thereafter at a price hurdle of 130%.

Proceeds will be used for general corporate purposes, which may include financing potential acquisitions and strategic transactions, and for working capital.

Cupertino, Calif.-based Verigy is a semiconductor test company.

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