Coinstar to price $175 million five-year convertibles to yield 4.25%-4.75%, up 27.5%-32.5%

By Rebecca Melvin

New York, Sept. 9 - Coinstar Inc. was expected to price $175 million of five-year convertible senior notes after the market close Thursday talked at a coupon of 4.25% to 4.75% and with an initial conversion premium of 27.5% to 32.5%, according to a market source.

There is an over-allotment option for an additional $25 million of notes.

The registered, off-the-shelf deal is being sold via joint bookrunners Morgan Stanley & Co. Inc., Bank of America Merrill Lynch, Jefferies & Co. and RBC Capital Markets Corp.

Co-managers are J.P. Morgan Securities Inc., Wells Fargo, KeyBanc Capital Markets and Merriman Curhan Ford & Co.

The bonds are non-callable for life with no puts and have contingent conversion at a price hurdle of 130%, as well as net share settlement, dividend protection and change-of-control protection.

Proceeds will be used to repay amounts outstanding under Coinstar's term loan under its senior secured credit facility and to pay down a portion of the outstanding amounts under Coinstar's $400 million revolving line of credit under its senior secured credit facility.

Bellevue, Wash.-based Coinstar owns and operates self-service coin-counting machines.

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