New Issue: Adelphia $500 million mandatory convertible at 7.5%, up 17.6%

By Ronda Fears

Nashville, Tenn., Jan. 16 - Adelphia Communications Corp. sold $500 million of mandatory convertibles at par of 25 to yield 7.5% with a 17.6% initial conversion premium. Salomon Smith Barney was sole lead manager of the deal, which was placed in an overnight marketing effort.

Adelphia said proceeds totaling $1.5 billion, including the sale of 40 million shares of common stock at $25.50, would be used to repay subsidiary bank debt.

The company completed the spin-off of Adelphia Business Solutions Inc. earlier this week.

This was Adelphia's fifth trip to the convertible market. In November, the cable operator sold $300 million of three-year 7.5% mandatory convertible preferreds, and the company also has 3.25% convertible notes due 2021, 6% convertible notes due 2006 and a perpetual 5.5% convertible preferred.

Terms of the new deal are:

Issuer: Adelphia Communications Corp.

Amount: $500 million

Greenshoe: $75 million

Lead Manager: Salomon Smith Barney

Maturity Date: Feb. 1, 2005

Dividend: 7.5%

Issue Price: Par, $25

Yield: 7.5%

Conversion Premium: 17.6%

Conversion Price: $25.20/$29.99

Conversion Ratio: 0.8336/0.9921

Call: Non-callable

Settlement Date: Jan. 22

End

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