Waste Connections to offer $175 million of 20-year convertibles priced at 3.75%, up 35%

By Kenneth Lim

Boston, March 14 - Waste Connections said Tuesday that it plans to price $175 million of 20-year convertible bonds with a coupon of 3.75% and an initial conversion price of $51.

The conversion price represents a 35% premium over Tuesday's closing stock price of $37.79.

The bonds are expected to be reoffered at 98.5, market sources said. Final pricing is expected on Wednesday before the market opens.

Citigroup is running the books of the Rule 144A deal, sources said.

There is a greenshoe option of $25 million.

The bonds will be non-callable for four years with the first put in year five. There is a contingent conversion trigger of 130%.

The bonds will have standard dividend protection and the premium will be made whole in a takeover.

Waste Connections, a Folsom, Calif.-based solid waste services company, plans to use the proceeds to buy back $65 million of its own stock. The rest of the proceeds will be used to reduce its borrowings pending the potential redemption after May 7 of its floating-rate convertible bond due 2007.

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