Advanced Energy talks $500 million five-year convertibles to yield 2.25%-2.75%, up 27.5%-32.5%

By Abigail W. Adams

Portland, Me., Sept. 6 – Advanced Energy Industries Inc. plans to price $500 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 2.25% to 2.75% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Citigroup Global Markets Inc., BofA Securities Inc. and Wells Fargo Securities LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

There is takeover and dividend protection above 10 cents a share.

The notes will be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company will enter into convertible note hedge and warrant transactions.

Proceeds will be used to cover the cost of the hedge transactions, to repurchase up to $60 million in common stock in privately negotiated transactions, to opportunistically repay outstanding debt, to fund growth plans which may include acquisitions and for general corporate purposes.

Advanced Energy is a Denver-based manufacturer of precision power conversion, measurement and control solutions for mission-critical applications.

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