Acxiom $150 million convertible notes talked at 3.75-4.25% yield, up 23-27%

By Ronda Fears

Nashville, Tenn., Jan. 29 - Acxiom Corp.'s $150 million of seven-year convertible subordinated notes are talked to yield 3.75% to 4.25% with a 23% to 27% initial conversion premium. JPMorgan is lead manager of the Rule 144A deal, which is set to price after the close Thursday.

The notes are non-callable for three years and there is a put option in year five.

Little Rock, Ark.-based Acxiom provides customer data integration software, database management services and customer data content.

The company plans to use proceeds of the new issue to repay debt, including the redemption of its $115 million convertible subordinated notes due 2003 and $25.7 million senior notes due 2007.

The company said the purpose of the offering is to improve its capital structure by replacing near-term obligations with long-term obligations by allowing the company to replace higher cost debt with lower cost debt. Simultaneously with the offering, the company intends to amend and restate its $265 million revolving credit facility to a $175 million credit facility and extend the maturity of the facility from December 2002 to January 2005.

Moody's assigned a Ba3 rating to the Acxiom new issue, and assigned a rating of Ba1 to the company's $175 million amended and restated guaranteed senior secured bank revolving credit facility due 2004. Moody's also upgraded Acxiom's $115 million 5.25% convertible subordinated notes due 2003, originally issued by May & Speh Inc., to Ba3 from B1. Moody's said the rating outlook is stable.

S&P assigned a BB- rating to the new issue and a BB+ rating to its $175 million senior secured revolving credit facility due 2005. S&P affirmed all other Acxiom ratings on the company, but said the outlook is negative and that the ratings will be lowered if Acxiom does not restore and maintain adequate profitability measures for the rating over the near term.

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