Nashville, Sept. 17 - Vitesse Semiconductor Corp. sold $90 million of 20-year convertible subordinated debentures at par to yield 1.5% with a 35% initial conversion premium via sole bookrunner Lehman Brothers.
The Rule 144A deal priced at the aggressive end of guidance for a 1.5% to 2.0% coupon and 30% to 35% initial conversion premium.
There is full dividend protection by way of a conversion ratio adjustment and takeover protection via a premium make-whole provision.
The Camarillo, Calif.-based maker of optical devices used in the networking, communications and storage industries said up to $20 million of proceeds would be used to repurchase stock from note purchasers. Vitesse expects to use remaining proceeds and cash on its balance sheet to retire its 4% convertible notes due March 2005.
About $195 million of the 4% convertible issue is outstanding. The issue originally totaled $720 million.
Terms of the deal are:
| Issuer: | Vitesse Semiconductor Corp.
|
| Issue: | Convertible subordinated debentures
|
| Bookrunner: | Lehman Brothers
|
| Amount: | $90 million
|
| Greenshoe: | $10 million
|
| Maturity: | Oct. 1, 2024
|
| Coupon: | 1.5%
|
| Price: | Par
|
| Yield: | 1.5%
|
| Conversion premium: | 35%
|
| Conversion price: | $3.92
|
| Conversion ratio: | 255.102
|
| Dividend protection: | Full conversion ratio adjustment
|
| Takeover protection: | Premium make-whole
|
| Call: | Non-callable for 3 years, then with 170% hurdle for 2 years
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| Put: | In years 5, 10 and 15
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| Price talk: | 1.5-2.0%, up 30-35%
|
| Pricing date: | Sept. 16, after the close
|
| Settlement date: | Sept. 22
|
| Distribution: | Rule 144A
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