Vornado launches $1.4 billion 20-year senior convertibles at 2.85%, up 30%; to be reoffered at 98-98.5

By Ronda Fears

Memphis, March 21 - Vornado Realty Trust launched $1.4 billion of 20-year convertible senior debentures on Wednesday after the market closed. The issue was talked to price with a coupon of 2.85% and an initial exchange premium of 30%, to be reoffered at 98 to 98.5.

The issue was slated to price on Thursday before the market opens.

There is an over-allotment option for a further $210 million.

J.P. Morgan, Citigroup Global Markets, Deutsche Bank and Lehman Brothers are joint book-runners of the registered offering.

The notes are non-callable for five years and may be put in years five, 10 and 15.

The convertibles have change-of-control protection.

New York-based Vornado, a diversified real estate investment trust, said proceeds would be used for working capital and other corporate purposes.

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