Lumentum plans $350 million offering of seven-year convertibles to yield 0.25%-0.75%, up 25%-30%

By Stephanie N. Rotondo

Seattle, March 2 – Lumentum Holdings Inc. intends to price $350 million of convertible senior notes due 2024, according to a press release published Thursday.

Price talk is for a yield of 0.25% to 0.75%, with an initial conversion premium of 25% to 30%, a market source reported.

Pricing is expected after the market closes on Thursday.

Goldman Sachs & Co. is the bookrunner. Lead manager is Stifel Nicolaus & Co. Inc.

The Rule 144A deal includes a $52.5 million over-allotment option.

The notes are contingently convertible, at the holder’s option, into cash, common stock or both, at the company’s choosing. However, the bonds cannot be converted unto common stock unless certain restrictions are satisfied by the company.

Proceeds will be used for general corporate purposes, which may include capital expenditures.

Lumentum is a Milpitas, Calif.-based manufacturer of innovative optical and photonic products.

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